2016 Annual Report

Leading with science

 Dear Shareholders

I am pleased to report that Tetra Tech had an

excellent fiscal 2016, with broad-based
growth, continued global expansion and
exceptional financial performance. In 2016 our
scientists and engineers worked on more than
60,000 projects in over 100 countries around
the world. We also celebrated our 50th year as a
company, and today we operate on a larger
scale than ever before. As we have grown,
we have built upon our founders vision of a
consulting and engineering company dedicated
to leading with science. In doing so, we deliver first-of-a-kind solutions to
our clients that provide reliable sources of water, protect and restore the
environment, and create sustainable infrastructure and power supplies. We
continue to innovate, adapting emerging technologies to provide unique
smart water solutions that manage water infrastructure more efficiently and
address changing environmental conditions.

In fiscal 2016, Tetra Tech delivered exceptional financial performance.

Revenue of $2.5 billion, net revenue of $1.9 billion, and operating income
of $170 million were up 14%, 13%, and 10%, respectively, from last year.
Throughout fiscal 2016, we returned approximately $120 million to
shareholders through a combination of dividends and share repurchases as
part of our long-term capital allocation strategy. We also ended the year with
record fourth quarter revenue and income, up 27% and 18%, respectively,
from the prior year1. Strong orders from our federal, commercial, and
municipal clients increased our backlog to an all-time high of $2.4 billion.
With the awards of significant and strategic contracts in 2016, especially
with the U.S. federal government, we increased our total contract capacity
to more than $14 billion for the first time in the Companys history. Our focus
on high-end consulting and engineering services, primarily in the water,
environment, and infrastructure markets, has resulted in increased margins
and technical-differentiation in the marketplace.

Acquisitions also contributed to our growth in the United States and

internationally this past fiscal year. In January 2016, we acquired Coffey
International Limited, a premier engineering firm headquartered in Sydney,
Australia. Coffey significantly expanded our geographic presence in the
Asia-Pacific region, adding more than 3,000 staff in technical engineering
and international development services. Through the Coffey acquisition,
we also added international development clients in the United Kingdom
and Australia. In the second quarter of fiscal 2016, we acquired INDUS
Corporation, a technology solutions firm headquartered in Vienna, Virginia
that is focused on water data analytics, secure infrastructure, and software
applications management. INDUS, combined with our exceptional team of
engineers and scientists, advances our growth strategy for fully-integrated
data analytics and software solutions.

1
*Ongoing operations in millions USD Financial results refer to ongoing operations. For a reconciliation to GAAP results refer to the Companys proxy
statement, Appendix A, and the Companys website at tetratech.com/investors.
Over the past fiscal year, our shareholders recognized our strong financial performance and strategic vision, as reflected
in a 40% increase in our stock price. In 2016 Tetra Tech was ranked by Engineering News-Record, the leading trade journal
for our industry, as the number one Water firm for 13th consecutive year. For the year, we were also ranked number one in
Water Treatment/ Desalination, Environmental Management, Dams and Reservoirs, Solid Waste, and Wind Power. During
the fiscal year Tetra Tech was awarded new contracts that advance our strategic plan and position the Company well into
the future. Prestigious awards included the U.S. Navy CLEAN contract ($200 million), the U.S. Department of Energy DICCE2
contract ($400 million), the U.S. Army Corps of Engineers Environmental Remediation contract ($400 million), and the U.S.
Air Force Global Architect-Engineer (A-E) contract ($500 million). We also won significant U.S. federal contracts that further
strengthen international energy and infrastructure development such as the Power Africa Contract ($148 million), with the
goal of adding 30,000 megawatts of essential energy infrastructure across sub-Saharan Africa; the Afghanistan A-E contract
($125 million), focused on providing engineering expertise in water, sanitation and energy throughout Afghanistan; and the
Water, Sanitation and Hygiene Finance contract ($40 million), which facilitates public investment in water and sanitation
services in Africa and Asia.

Our projects provide long-term, sustainable solutions for our clients that balance functionality with stewardship of local
resources. For the recently opened Panama Canal expansion, Tetra Tech designed the water saving basins that reduce the
amount of water needed to operate each of the lock systems by 60%, or 630 billion gallons per year for both the Pacific
and Atlantic locks when operating at capacity. In response to long-term concerns over water supplies in the southern
United States, Tetra Tech designed and tested first-of-a-kind water reuse systems to provide additional sources of water for
communities. To address the need for greater food security in the Asia-Pacific region, our scientists and engineers designed
programs to manage fisheries and protect coral reefs. And to combat the increasing frequency of natural disasters, we
worked and continue to work with our clients on state-of-the-art resilient infrastructure designs and mitigation plans.

Now as we enter 2017, we are focused on bringing Tetra Techs vast capabilities and next generation solutions to our
existing and future clients. We are leading with science, by adapting the latest technologies into our service offerings,
and leveraging our resources, across all of our geographies and service lines. We are investing in strategic initiatives that
build on our strengths in the rapidly evolving areas of data analytics and smart water infrastructure, skillsets that help
our clients interpret and utilize the exponential increase in data available today. In each geography we serve, across all of
our 400 offices, we are leveraging our network of technical experts to provide innovative solutions that address essential
infrastructure and water needs, while also helping communities adapt and plan for the future. We also are using our
expanded client base, through our Coffey acquisition, to grow our international development services worldwide. And, as
we advance our strategy and invest in our future, we are planning to acquire companies that share our values, bring new
ideas and expertise, and expand our global coverage.

Today, Tetra Tech is in a stronger strategic and financial position than ever before. Services in our core markets of water,
environment, and infrastructure are in unprecedented demand, and with 16,000 associates across 6 continents, we are
in a unique position to meet the worlds most complex challenges. On behalf of Tetra Tech, I thank you for your continued
confidence and support. We look forward to the opportunities ahead and a very successful 2017.

Sincerely,

Dan Batrack
Chairman & CEO
2016 Annual Report
 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended October 2, 2016
or
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Transition Period from to
Commission File Number 0-19655

TETRA TECH, INC.

(Exact name of registrant as specified in its charter)
Delaware 95-4148514
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3475 East Foothill Boulevard, Pasadena, California 91107
(Address of principal executive offices) (Zip Code)
(626) 351-4664
(Registrants telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $.01 par value The NASDAQ Stock Market LLC
(Title of class) (Name of exchange)
Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes

No 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes  No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
No 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes
No 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is
not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting
company in Rule 12b-2 of the Exchange Act. Large accelerated filer
Accelerated filer  Non-accelerated filer (Do
not check if a smaller reporting company)  Smaller reporting company 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  No

The aggregate market value of the registrants common stock held by non-affiliates on March 24, 2016, was $1.4 billion
(based upon the closing price of a share of registrants common stock as reported by the Nasdaq National Market on that
date).
On November 7, 2016, 57,060,803 shares of the registrants common stock were outstanding.
DOCUMENT INCORPORATED BY REFERENCE
Portions of registrants Proxy Statement for its 2017 Annual Meeting of Stockholders are incorporated by reference in
Part III of this report where indicated.
 TABLE OF CONTENTS

Page

PART I

Item 1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Tetra Tech Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Reportable Segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Water, Environment & Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Resource Management & Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Remediation and Construction Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Project Examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Marketing and Business Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Sustainability Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Acquisitions and Divestitures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Backlog . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Seasonality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Potential Liability and Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Item 1A Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Item 1B Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Item 2 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Item 3 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Item 4 Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

PART II

Item 5 Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 46
Item 6 Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 48
Item 7 Managements Discussion and Analysis of Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 48
Item 7A Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . .. 72
Item 8 Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . .. 74
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 124
Item 9A Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 124
Item 9B Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 125

PART III

Item 10 Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . 125

Item 11 Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

2
 Page

Item 12 Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Item 13 Certain Relationships and Related Transactions, and Director Independence . . . . . . 126
Item 14 Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

PART IV

Item 15 Exhibits, Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Index to Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130

3
 This Annual Report on Form 10-K (Report), including the Managements Discussion and Analysis
of Financial Condition and Results of Operations, contains forward-looking statements regarding future events
and our future results that are subject to the safe harbors created under the Securities Act of 1933 (the
Securities Act) and the Securities Exchange Act of 1934 (the Exchange Act). All statements other than
statements of historical facts are statements that could be deemed forward-looking statements. These statements
are based on current expectations, estimates, forecasts and projections about the industries in which we operate
and the beliefs and assumptions of our management. Words such as expects, anticipates, targets,
goals, projects, intends, plans, believes, estimates, seeks, continues, may, variations of
such words, and similar expressions are intended to identify such forward-looking statements. In addition,
statements that refer to projections of our future financial performance, our anticipated growth and trends in
our businesses, and other characterizations of future events or circumstances are forward-looking statements.
Readers are cautioned that these forward-looking statements are only predictions and are subject to risks,
uncertainties and assumptions that are difficult to predict, including those identified below under Risk
Factors, and elsewhere herein. Therefore, actual results may differ materially and adversely from those
expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any
forward-looking statements for any reason.

PART I

Item 1. Business

General

Tetra Tech, Inc. is a leading provider of consulting and engineering services that focuses on water,
environment, infrastructure, resource management, energy, and international development. We are a
global company that is renowned for our expertise in providing water-related services for public and
private clients. We typically begin at the earliest stage of a project by identifying technical solutions and
developing execution plans tailored to our clients needs and resources. Our solutions may span the entire
life cycle of consulting and engineering projects and include applied science, data analysis, research,
engineering, design, construction management, and operations and maintenance.

Engineering News-Record (ENR), the leading trade journal for our industry, has ranked us the
number one water services firm for the past 13 years, most recently in its May 2016 Top 500 Design
Firms issue. In 2016, Tetra Tech was also ranked number one in water treatment/desalination, water
treatment and supply, environmental management, dams and reservoirs, solid waste, and wind power.
ENR ranks Tetra Tech among the largest 10 firms in numerous other service lines, including engineering/
design, environmental science, chemical and soil remediation, site assessment and compliance, and
hazardous waste.

Our reputation for high-end consulting and engineering services and our ability to apply our skills
to develop solutions for water and environmental management has supported our growth over 50 years
since the founding of our predecessor company. By combining ingenuity and practical experience, we have
helped to advance solutions for managing water, protecting the environment, providing energy, and
engineering the infrastructure for our cities and communities. Today, we are working on projects
worldwide, and currently have approximately 16,000 staff, and over 400 offices.

4
Mission

Our mission is to be the premier worldwide consulting and engineering firm, focusing on water,
environment, infrastructure, resource management, energy, and international development services. The
following core principles form the underpinning of how we work together to serve our clients:

Service. We put our clients first. We listen closely to better understand our clients needs and
deliver smart, cost-effective solutions that meet their needs.

Value. We solve our clients problems as if they were our own. We develop and implement
real-world solutions that are innovative, efficient and practical.

Excellence. We bring superior technical capability, disciplined project management, and

excellence in safety and quality to all of our services.

Opportunity. Our people are our number one asset. Opportunity means new technical
challenges that provide advancement within our company, encouraging a diverse workforce, and
ensuring a safe workplace.

The Tetra Tech Strategy

To continue our successful growth and our competitive position in the markets we serve, we have
implemented the following strategy that is integral to our future success. Our approach is to lead with
science and provide high-end solutions that are differentiated and of long-lasting sustainable benefit to our
clients. Our approach encompasses five key aspects of differentiation:

Technical Differentiation. Since our inception, we have provided innovative consulting and
engineering services, with a focus on providing cost-effective solutions for all aspects of water resource
management. Adoption of emerging science and technology in the development of high-end consulting
and engineering solutions is central to our approach to lead with science in the delivery of our services.

Relationships and Trust. We have achieved a broad client and contract base by understanding our
clients priorities and demonstrating a long track record of successful performance that results in repeat
business and limits competition. We believe that proximity to our clients is also instrumental to integrating
global experience and resources with an understanding of our local clients needs. Over the past year, we
worked in over 100 countries, helping government and private sector clients address complex water,
environment, energy and related infrastructure needs.

Institutional Knowledge. Over our history, we have supported both public and private clients,
many for multiple decades of continuous contracts and repeat business. Long-term relationships provide us
with institutional knowledge of our clients programs, past projects and internal resources. Institutional
knowledge is often a significant factor in providing competitive proposals and cost-effective solutions
tailored to our clients needs.

One-of-a-Kind Solutions. We are often at the leading edge of new challenges where we are
providing one-of-a-kind solutions. These might be a new water reuse technology, a unique solution to
addressing new regulatory requirements, a new monitoring approach for assessing infrastructure assets or a
computer model for real time management of water resources. We are constantly evolving our intellectual
property, including a wide range of computer models, algorithms, analytical software, and environmental
treatment approaches and instrumentation, often in collaboration with our forward-thinking clients.
Bringing our one-of-a-kind solutions to real world problems is a differentiator in expanding our services
and growing our business.

5
 Smart Solutions and Innovation. Smart solutions often require taking the same pieces of the
puzzle and putting them together in a different way for a better outcome. Complex projects for the public
and private sectors, at the leading edge of policy and technology development, often require innovative
solutions that combine multiple aspects of our interdisciplinary capabilities, technical resources and
institutional knowledge.

Our strategy leverages our five differentiators to drive growth in our existing water, environment,
infrastructure, resource management, energy, and international development markets. We are focused on
continuing to expand our leadership position with long-term clients, while also investing in emerging
growth areas. Our differentiated capabilities provide us a competitive advantage to address new
opportunities in the marketplace and apply new technologies to the fastest growing areas of our business.

To support our growth plans, we actively attract, recruit and retain key hires. Our combination of
high-end science and consulting with practical applications provides challenging and rewarding
opportunities for our employees, thereby enhancing our ability to recruit and retain top quality talent. Our
internal networking programs, leadership training, entrepreneurial environment, focus on technical
excellence, and global project portfolio help to attract and retain highly qualified individuals.

We also maintain a strong emphasis on project management at all levels of the organization. Our
client-focused project management is supported by strong fiscal management and financial tools. We take
a disciplined approach to monitoring, managing and improving our return on investment in each of our
business areas through our efforts to negotiate appropriate contract terms, manage our contract
performance to minimize schedule delays and cost overruns, and promptly bill and collect accounts
receivable.

Our strategic growth plans are augmented by our selective investment in acquisitions aligned with
our business. Acquisitions enhance plans to broaden our service offerings, add contract capacity and
extend our geographic presence. Our experience with acquisitions strengthens our ability to integrate and
rapidly leverage the resources of the acquired companies post-acquisition.

Reportable Segments

In fiscal 2016, we managed our continuing operations under two reportable segments. We report
our water resources, water and wastewater treatment, environment, and infrastructure engineering
activities in the Water, Environment and Infrastructure (WEI) reportable segment. Our Resource
Management and Energy (RME) reportable segment includes our oil and gas, energy, international
development, waste management, remediation, and utilities services. In addition, we report the results of
the wind-down of our non-core construction activities in the Remediation and Construction Management
(RCM) reportable segment. The following table presents the percentage of our revenue by reportable
segment:

Fiscal Year
Reportable Segment 2016 2015 2014
WEI . . . . . . ......... . . . . . . . . . . . . . 39.8% 43.2% 41.0%
RME . . . . . ......... . . . . . . . . . . . . . 60.8 55.8 53.7
RCM . . . . . ......... . . . . . . . . . . . . . 2.0 3.7 8.9
Inter-segment elimination . . . . . . . . . . . . . . (2.6) (2.7) (3.6)
100.0% 100.0% 100.0%

For additional information regarding our reportable segments, see Note 19, Reportable
Segments of the Notes to Consolidated Financial Statements included in Item 8. For more information

6
on risks related to our business, segments and geographic regions, including risks related to foreign
operations, see Item 1A, Risk Factors of this report.

Water, Environment and Infrastructure

WEI provides consulting and engineering services worldwide for a broad range of water,
environment, and infrastructure-related needs in both developed and emerging economies. WEI supports
both public and private clients including federal, state/provincial and local governments, and commercial
clients. The primary WEI markets include water resources analysis and water management, environmental
monitoring, data analytics, government consulting, and a broad range of civil infrastructure master
planning and engineering design for facilities, transportation, and local development projects. WEIs
services span from early data collection and monitoring, to data analysis and information technology, to
science and engineering applied research, to engineering design, to construction management, and
operations and maintenance.

WEI provides our clients with sustainable solutions that optimize their water management and
environmental programs to address regulatory requirements, improve operational efficiencies, manage
assets, and promote corporate responsibility. Our services advance sustainability through the greening of
infrastructure, design of energy efficiency and resource conservation programs, innovation in the capture
and sequestration of carbon, formulation of emergency preparedness and response plans, and
improvement in water and land resource management practices. We provide climate change and energy
management consulting, and greenhouse gas inventory assessment, certification, reduction, and
management services.

Many government and commercial organizations face complex problems due to increased demand
and competition for water and natural resources, newly understood threats to human health and the
environment, aging infrastructure, and demand for new and more resilient infrastructure in emerging
economies. Our integrated water management services support government agencies responsible for
managing water supplies, wastewater treatment, storm water management, and flood protection. These
services also support private sector clients that require water supply and treatment for industrial processes.
We help our clients develop water supplies and manage water resources, while addressing a wide range of
local and national government requirements and policies. Fluctuations in weather patterns and extreme
events, such as prolonged droughts and more frequent flooding, are increasing concerns over the reliability
of water supplies, the need to protect coastal areas, and flood mitigation and adaptation in metropolitan
areas.

Examples of our services include the following:

Providing high-end water analysis services world-wide, including master planning; data analytics,
modeling of surface and groundwater behavior, particularly in the areas of water resources,
watershed management, and climate adaptation analysis; drought mitigation and water supply
development; and flood mitigation and management.

Supporting innovative software and system design services for a wide range of water resource,
environmental and infrastructure data management needs, including informational technology
systems, portals, dashboards, data management, data analytics, and statistical analysis.

Providing smart water infrastructure solutions that integrate water modeling, instrumentation
and controls, and real-time controls to create flexible water systems that respond to changing
conditions, optimize use of infrastructure, and provide clients with the ability to more efficiently
monitor and manage their water infrastructure.

7
 Providing consulting and engineering design services that are applied to numerous aspects of
water quality and quantity management, including major water and wastewater treatment
plants, combined sewer storage and separation, water reuse (indirect and potable reuse)
programs, regional storm water management and green infrastructure design, and drainage and
flood control; supporting master planning, permitting, design, and construction of water-related
redevelopment projects, and parks and river corridor restoration projects; and providing water
supply, water treatment, and water reuse services.

Providing comprehensive services for environmental planning, cleanup and reuse of sites
contaminated with hazardous materials, toxic chemicals, and oil and petroleum products, which
cover all phases of the remedial planning process, starting with emergency response and initial
site assessment through removal actions, remedial design and implementation oversight; and
supporting both commercial and government clients in planning and implementing remedial
activities at numerous sites around the world, and providing a broad range of environmental
analysis and planning services.

Offering engineering design services for commercial clients; helping to renovate, upgrade, and
modernize industrial water supplies, and address water treatment and water reuse needs; and
providing plant engineering, project execution, and program management services for industrial
water treatment projects throughout the world.

Providing analytical, engineering, architecture, geotechnical, and construction management

services for infrastructure projects, including roadway monitoring and asset management
services, collecting condition data, optimizing upgrades and long-term planning for expansion;
providing multi-model design services for commuter railway stations, airport expansions, bridges
and major highways, and ports and harbors; and designing solutions to repair, replace, and
upgrade older transportation infrastructure.

Providing infrastructure design services in extreme and remote areas by using specialized
techniques that are adapted to local resources, while minimizing environmental impacts, and
considering potential climate change impacts. These include providing consulting, geotechnical,
and design services to owners of transportation, natural resources, energy and community
infrastructure in the Arctic and areas of permafrost around the globe.

Providing planning, architectural, and engineering services for U.S. federal, state and local
government, and commercial facilities and their related infrastructure needs including military
housing, and educational, institutional, corporate headquarters, healthcare, and research
facilities; providing civil, electrical, mechanical, structural, plumbing and fire protection
engineering and design services for buildings and surrounding developments around the world;
and providing engineering and construction management projects for a wide range of clients
with specialized needs, such as security systems, training and audiovisual facilities, clean rooms,
laboratories, medical facilities and emergency preparedness facilities.

Providing technology systems to optimize the airspace system and related aviation systems
integration for the U.S. and other countries. Our aviation airspace services include data
management, data processing, communications and outreach, and systems development; and
providing systems analysis and information management.

Resource Management and Energy

RME provides consulting and engineering services worldwide for a broad range of resource
management and energy needs. RME supports both private and public clients, including global industrial

8
and commercial clients, major international development agencies, and U.S. federal agencies in large-scale
remediation. The primary markets for RMEs services include natural resources, energy, international
development, remediation, waste management, and utilities. RMEs services span from early data
collection and monitoring, to data analysis and information technology, to feasibility studies and
assessments, to science and engineering applied research, to engineering design, to construction
management, and operations and maintenance. RME also supports engineering, procurement and
construction management (EPCM) for full service implementation of commercial projects.

RME supports our clients in addressing emerging policies, resource limitations and concern about
climate change, including the design of energy conservation measures, retrofits to existing structures,
upgrades to energy transmission infrastructure, and the development of renewable energy resources. We
also support governments in deploying international development programs for developing nations to help
them overcome numerous challenges, including access to potable water, agricultural programs, governance
and infrastructure programs, education, and human health.

Examples of our services include the following:

Supporting oil and gas clients across North America, Australia, Papua New Guinea, and the
Middle East in the upstream, midstream and downstream market sectors. Our services include
environmental permitting support, siting studies, strategic planning and analyses; design of well
pads and surface impoundments for drilling sites; water management for exploration activities;
design of midstream pipelines and associated pumping stations and storage facilities;
construction monitoring, design and construction management for downstream sustaining
capital projects; biological and cultural assessments, and site investigations; and hazardous
waste site remediation.

Providing a full range of services to electric power utilities and independent power producers
worldwide, ranging from macro-level planning and management advisory services to project-
specific environmental, engineering, construction management, and operational services, and
advising on the design and implementation of a smart grid both in the U.S. and internationally,
including increasing utility automation, information and operational technologies, and critical
infrastructure security. For utilities and governmental regulatory agencies, services include
policy and regulatory development, utility management, performance improvement, asset
management and evaluation, and transaction support services. For developers and owners of
renewable energy resources such as solar grid and off-grid, on-shore and off-shore wind, biogas
and biomass, tidal, and hydropower, and conventional power generation facilities, as well as
transmission and distribution assets, services include environmental, engineering, procurement,
operations and maintenance, and regulatory support for all project phases.

Providing international development services to many donor agencies to develop safe and
reliable water supplies and sanitation services, support the eradication of poverty, improve
livelihoods, promote democracy and increase economic growth; planning, designing,
implementing, researching, and monitoring projects in the areas of climate change, agriculture
and rural development, governance and institutional development, natural resources and the
environment, infrastructure, economic growth, energy, rule of law and justice systems, land
tenure and property rights, and training and consulting for public-private partnerships; and
building capacity and strengthening institutions in areas such as global health, energy sector
reform, utility management, education, food security, and local governance.

Offering a wide range of consulting and engineering services for solid waste management,
including landfill design and management, throughout the United States and Canada; providing
design, construction management, and maintenance services to manage solid and hazardous

9
 waste, for environmental, wastewater, energy, oil and gas containment, mining, utilities,
aquaculture, and other industrial clients; designing and installing geosynthetic liners for large
lining and capping projects, as well as innovative renewable energy projects such as solar
energy-generating landfill caps; and providing full-service solutions for gas-to-energy facilities to
efficiently use landfill methane gas.

Providing environmental remediation and reconstruction services to evaluate and restore lands
to beneficial use, including the identification, evaluation and destruction of unexploded
ordinance, both domestically and internationally; investigating, remediating, and restoring
contaminated facilities at military locations in the U.S. and around the world; managing large,
complex sediment remediation programs that help restore rivers and coastal waters to beneficial
use; constructing state-of-the-art water treatment plants for commercial clients; and supporting
utilities in the U.S. in implementing infrastructure needs, including broadband, wired utilities,
and natural gas distribution systems.

Remediation and Construction Management

We report the results of the wind-down of our non-core construction activities in the RCM
reportable segment. The remaining work to be performed in this segment will be substantially completed
in fiscal 2017.

Project Examples

The following table presents brief examples of projects in our ongoing operations during fiscal
2016:

Segment Representative Projects

WEI For the U.S. Environmental Protection Agency (EPA) Office of Water and Office
of Science and Technology, providing analysis of waterways in the U.S. and technical
analysis of emerging monitoring and analytical techniques.

For the District of Columbia Department of the Environment, providing consulting

and environmental analysis for the assessment and cleanup of contaminated
sediments in a 12-mile portion of the Anacostia River and sites located within its
watershed.

Providing emergency management and planning services for multiple state and local
agencies, especially in coastal regions, such as response and recovery from wildfires
in California, flooding in the Gulf Coast and West Virginia, and Hurricane Matthew
along the U.S. Atlantic coast, and continued infrastructure recovery services
following Superstorm Sandy in New York and New Jersey.

Providing EPA Superfund Technical Assessment and Response Team program

support with emergency preparedness, environmental response, removal action, site
assessment, community involvement, and other Superfund technical services at
locations in 23 states.

For the Montana Department of Environmental Quality at the Carpenter-Snow

Creek Mining District Superfund site, providing services including investigation, risk
assessment, engineering study, design, cleanup oversight, and long-term monitoring
services for an area that includes 70 abandoned mines and associated impacted
lands.

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Segment Representative Projects
Providing EPA climate change program support for implementing voluntary
domestic and international programs to reduce emissions of methane (a significant
greenhouse gas) from landfills, oil and gas operations, livestock farms, and
wastewater treatment plants.

Providing smart water infrastructure solutions for stormwater capture and water
quality management for municipalities in Los Angeles and San Diego, California.

Providing smart water solutions using real time control systems to reduce overflows,
maximize use of retention in the system, and improve operational efficiency in cities
in the U.S., Canada, and France.

Providing engineering services to the City of Clearwater, Florida for the design of
the first potable water reuse project in Florida, using a combination of innovative
groundwater recharge and treatment.

Providing program management for the City of Detroit for the broad
implementation of community-based stormwater management and green
infrastructure, effectively combining city revitalization initiatives and reduction of
overflows.

Providing master planning services to Miami-Dade County, Florida in smart, energy

efficient and resilient water infrastructure solutions for the most populous county in
Florida.

Providing transportation planning, data collection and design services for the
Province of Alberta, Canada, with specialized expertise in arctic region
infrastructure.

Providing energy efficient, net zero project development and asset management
services for the U.S. military, including the Army, Navy and Air Force.

Providing energy, environmental assessment and studies to mitigate the impact of

military operations on sensitive flora and fauna at U.S. bases, such as the
endangered desert tortoise on a Marine Corps base.

Providing master planning and engineering design services to the U.S. Army Corps
of Engineers (USACE) on U.S. bases and in international facilities through
multiple district and program specific contracts.

RME For the U.S. Department of Energy (DOE) National Energy Technology
Laboratory and the Electric Power Institute, utilizing gravity/magnetics techniques
and geostatistical modeling to predict the potential for coal basins to become viable
sources for rare earth elements.

For the Brazilian Samarco Mining Tailings Dam collapse, utilizing satellite images to
assess dam breakage and perform virtual reality modeling.

11
Segment Representative Projects
For the U.S. Agency for International Development (USAID), implementing
projects in Africa, Asia, the Middle East, Latin America, and Eastern Europe
including the USAID Power Africa program with technical and capacity building
expertise to accelerate clean energy project development; and for USAID and the
government of Afghanistan, to empower women to increase gender diversity and
engagement in civil society.

For USAID, designing and implementing climate change programs, including

mitigation of global climate change impacts and strengthening of community
resilience to withstand extreme weather events through programs in Southeast Asia,
Latin America, and West Africa.

For the U.K. Department for International Development, designing and

implementing projects in Africa, Asia, and the Middle East.

For the Australian Department of Foreign Affairs and Trade, implementing a range
of development projects in the Asia Pacific region.

For DONG Energy, providing constraints analyses, siting studies, marine geophysical
surveys, submarine cable routing analyses, specialty marine impact studies,
permitting services, biological and cultural resource surveys, construction
compliance, and support for U.S. east coast offshore energy projects.

For multiple oil & gas clients, providing engineering, detailed design, and
construction monitoring for midstream pipeline companies; performing in-plant
engineering and sustaining capital project work at downstream refineries; building a
specialty insulated pipeline for the transport of hot bitumen in Alberta, Canada; and
preparing the Federal Energy Regulatory Commission environmental permitting for
the Mountain Valley gas pipeline project.

Using our proprietary Solar Thermal Aerobic Recirculation Treatment system to

implement enhanced remediation of contaminated groundwater at multiple Caltex
sites in Australia.

Designing the Puente Hills Intermodel Facility for the Los Angeles County
Sanitation Districts.

Providing turn-key design, construction, dredging, and treatment services on the

Lower Fox River in Wisconsin.

Treating water discharge from a closed mine site through the design-build of a
state-of-the-art water treatment plant.

Working in the Marcellus Shale Play to transform a depleted natural gas field into
the only commercial underground saltwater disposal injection well facility in
Pennsylvania.

Preparing a third party environmental impact statement for Clean Line Energy and
the DOE for a 720-mile overhead 600 kilovolt high voltage direct current electric
transmission line across Oklahoma, Arkansas, and Tennessee.

12
Clients

We provide services to a diverse base of international, U.S. commercial, U.S. federal, and U.S.
state and local government clients. The following table presents the percentage of our revenue by client
sector:

Fiscal Year
Client Sector 2016 2015 2014
(1)
International ........... . . . . . . . 28.1% 24.6% 25.9%
U.S. commercial . . . . . . . . . . . . . . . . . . 29.5 32.0 28.9
U.S. federal government (2) . . . . . . . . . . 30.4 30.9 30.9
U.S. state and local government . . . . . . . 12.0 12.5 14.3
100.0% 100.0% 100.0%

(1)
Includes revenue generated from foreign operations, primarily in Canada and Australia, and
revenue generated from non-U.S. clients.
(2)
Includes revenue generated under U.S. federal government contracts performed outside the
United States.

U.S. federal government agencies are significant clients. USAID accounted for 13.1%, 9.6% and
9.2% of our revenue in fiscal 2016, 2015 and 2014, respectively. The Department of Defense (DoD)
accounted for 8.2%, 10.4%, and 11.7% of our revenue in fiscal 2016, 2015, and 2014, respectively. We
typically support multiple programs within a single U.S. federal government agency, both domestically and
internationally. We also assist U.S. state and local government clients in a variety of jurisdictions across the
United States. In Canada, we work for several provinces and a variety of local jurisdictions. Our
commercial clients include companies in the chemical, energy, mining, pharmaceutical, retail, aerospace,
automotive, petroleum, and communications industries. No single client, except for U.S. federal
government clients, accounted for more than 10% of our revenue in fiscal 2016.

Contracts

Our services are performed under three principal types of contracts with our clients: fixed-price,
time-and-materials, and cost-plus. The following table presents the percentage of our revenue by contract
type:

Fiscal Year
Contract Type 2016 2015 2014
Fixed-price . . . . . . . . . . . . . . . . . . . . . 30.0% 35.4% 45.3%
Time-and-materials . . . . . . . . . . . . . . . . 50.9 45.8 36.3
Cost-plus . . . . . . . . . . . . . . . . . . . . . . . 19.1 18.8 18.4
100.0% 100.0% 100.0%

Under a fixed-price contract, the client agrees to pay a specified price for our performance of the
entire contract or a specified portion of the contract. Some fixed-price contracts can include date-certain
and/or performance obligations. Fixed-price contracts carry certain inherent risks, including risks of losses
from underestimating costs, delays in project completion, problems with new technologies, price increases
for materials, and economic and other changes that may occur over the contract period. Consequently, the
profitability of fixed-price contracts may vary substantially. Under our time-and-materials contracts, we are
paid for labor at negotiated hourly billing rates and also paid for other expenses. Profitability on these
contracts is driven by billable headcount and cost control. Many of our time-and-materials contracts are
subject to maximum contract values and, accordingly, revenue related to these contracts is recognized as if

13
these contracts were fixed-price contracts. Under our cost-plus contracts, some of which are subject to a
contract ceiling amount, we are reimbursed for allowable costs and fees, which may be fixed or
performance-based. If our costs exceed the contract ceiling or are not allowable, we may not be able to
obtain full reimbursement. Further, the amount of the fee received for a cost-plus award fee contract
partially depends upon the clients discretionary periodic assessment of our performance on that contract.

Some contracts with the U.S. federal government are subject to annual funding approval. U.S.
federal government agencies may impose spending restrictions that limit the continued funding of our
existing contracts and may limit our ability to obtain additional contracts. These limitations, if significant,
could have a material adverse effect on us. All contracts with the U.S. federal government may be
terminated by the government at any time, with or without cause.

U.S. federal government agencies have formal policies against continuing or awarding contracts
that would create actual or potential conflicts of interest with other activities of a contractor. These policies
may prevent us from bidding for or performing government contracts resulting from or related to certain
work we have performed. In addition, services performed for a commercial or government sector client
may create conflicts of interest that preclude or limit our ability to obtain work for a private organization.
We attempt to identify actual or potential conflicts of interest and to minimize the possibility that such
conflicts could affect our work under current contracts or our ability to compete for future contracts. We
have, on occasion, declined to bid on a project because of an existing or potential conflict of interest.

Some of our operating units have contracts with the U.S. federal government that are subject to
audit by the government, primarily by the Defense Contract Audit Agency (DCAA). The DCAA
generally seeks to (i) identify and evaluate all activities that contribute to, or have an impact on, proposed
or incurred costs of government contracts; (ii) evaluate a contractors policies, procedures, controls, and
performance; and (iii) prevent or avoid wasteful, careless, and inefficient production or service. To
accomplish this, the DCAA examines our internal control systems, management policies, and financial
capability; evaluates the accuracy, reliability, and reasonableness of our cost representations and records;
and assesses our compliance with Cost Accounting Standards (CAS) and defective-pricing clauses found
within the Federal Acquisition Regulation (FAR). The DCAA also performs an annual review of our
overhead rates and assists in the establishment of our final rates. This review focuses on the allowability of
cost items and the applicability of CAS. The DCAA also audits cost-based contracts, including the
close-out of those contracts.

The DCAA reviews all types of U.S. federal government proposals, including those of award,
administration, modification, and re-pricing. The DCAA considers our cost accounting system, estimating
methods and procedures, and specific proposal requirements. Operational audits are also performed by
the DCAA. A review of our operations at every major organizational level is conducted during the
proposal review period. During the course of its audit, the U.S. federal government may disallow costs if it
determines that we accounted for such costs in a manner inconsistent with CAS. Under a government
contract, only those costs that are reasonable, allocable, and allowable are recoverable. A disallowance of
costs by the U.S. federal government could have a material adverse effect on our financial results.

In accordance with our corporate policies, we maintain controls to minimize any occurrence of
fraud or other unlawful activities that could result in severe legal remedies, including the payment of
damages and/or penalties, criminal and civil sanctions, and debarment. In addition, we maintain
preventative audit programs and mitigation measures to ensure that appropriate control systems are in
place.

We provide our services under contracts, purchase orders, or retainer letters. Our policy requires
that all contracts must be in writing. We bill our clients in accordance with the contract terms and
periodically based on costs incurred, on either an hourly-fee basis or on a percentage-of-completion basis,

14
as the project progresses. Most of our agreements permit our clients to terminate the agreements without
cause upon payment of fees and expenses through the date of the termination. Generally, our contracts do
not require that we provide performance bonds. If required, a performance bond, issued by a surety
company, guarantees a contractors performance under the contract. If the contractor defaults under the
contract, the surety will, at its discretion, complete the job or pay the client the amount of the bond. If the
contractor does not have a performance bond and defaults in the performance of a contract, the contractor
is responsible for all damages resulting from the breach of contract. These damages include the cost of
completion, together with possible consequential damages such as lost profits.

Marketing and Business Development

Our management team establishes our overall business strategy. Our ongoing strategic planning
defines and guides our investment in marketing and business development to leverage our differentiators
and target priority programs and growth markets. We maintain centralized business development resources
to develop our corporate branding and marketing materials, support proposal preparation and planning,
conduct market research, and manage promotional and professional activities, including appearances at
trade shows, direct mailings, advertising, and public relations.

We have established company-wide growth initiatives that reinforce internal coordination, track
the development of new programs, identify and coordinate collective resources for major bids, and help us
build interdisciplinary teams and provide innovative solutions for major pursuits. Our growth initiatives
provide a forum for cross-sector collaboration and the development of interdisciplinary solutions. We
continuously identify new markets that are consistent with our strategic plan and service offerings, and we
leverage our full-service capabilities and internal coordination structure to develop and implement
strategies to research, anticipate, and position us for future procurements and emerging programs.

Business development activities are implemented by our technical and professional management
staff throughout the company with the support of company-wide resources and expertise. Our project
managers and technical staff have the best understanding of a clients needs and the effect of local or
client-specific issues, laws and regulations, and procurement procedures. Our professional staff members
hold frequent meetings with existing and potential clients; give presentations to civic and professional
organizations; and present seminars on research and technical applications. Essential to the effective
development of business is each staff members access to all of our service offerings through our internal
technical and geographic networks. Our strong internal networking programs help our professional staff
members to pursue new opportunities for both existing and new clients. These networks also facilitate our
ability to provide services throughout the project life cycle from the early studies to operations and
maintenance. Our enterprise-wide knowledge management systems include skills search tools, business
development tracking, and collaboration tools.

Sustainability Program

Tetra Tech supports clients in more than 100 countries around the world, helping them to solve
complex problems and achieve solutions that are technically, socially, and economically sustainable. Our
high-end consulting and engineering services focus on using innovative technologies and creative solutions
to minimize environmental impacts. Our greatest contribution toward sustainability is through the projects
we perform every day for our clients. Sustainability is embedded in our projects from recycling freshwater
supplies to recycling waste products, reducing energy consumption, and reducing greenhouse gas emissions
in developing countries.

Our Sustainability Program allows us to further expand our commitment to sustainability by

encouraging, coordinating, and reporting on actions to minimize our collective impacts on the
environment. Our Sustainability Program has three primary pillars: Projects the solutions we provide for

15
our clients; Procurement our procurement and subcontracting approaches; and Processes the internal
policies and processes that promote sustainable practices, reduce costs, and minimize environmental
impacts. In addition, our program is based on the Global Reporting Initiative (GRI) Sustainability
Report Framework, the internationally predominant sustainability reporting protocol for corporate
sustainability plans, which includes three fundamental areas: environmental, economic, and social
sustainability.

Our Sustainability Program is led by our Chief Sustainability Officer, who has been appointed by
executive management and is supported by other key corporate and operations representatives via our
Sustainability Council. We have established a clear set of metrics to evaluate our progress toward our
sustainability goals. Each metric corresponds with one or more performance indicators from GRI. These
metrics include economic, health and safety, information technology, human resources, and real estate. We
continuously implement sustainability-related policies and practices, and we assess the results of our efforts
in order to improve upon them in the future. Our executive management team reviews and approves the
Sustainability Program and evaluates our progress in achieving the goals and objectives outlined in our
plan. We publish an annual sustainability report that documents our progress.

Acquisitions and Divestitures

Acquisitions. We continuously evaluate the marketplace for acquisition opportunities to further

our strategic growth plans. Due to our reputation, size, financial resources, geographic presence and range
of services, we have numerous opportunities to acquire privately and publicly held companies or selected
portions of such companies. We evaluate an acquisition opportunity based on its ability to strengthen our
leadership in the markets we serve, add new geographies, and provide complementary skills. Also, during
our evaluation, we examine an acquisitions ability to drive organic growth, its accretive effect on long-term
earnings, and its ability to generate return on investment. Generally, we proceed with an acquisition if we
believe that it could strategically expand our service offerings, improve our long-term financial
performance, and increase shareholder returns.

We view acquisitions as a key component in the execution of our growth strategy, and we intend to
use cash, debt or securities, as we deem appropriate, to fund acquisitions. We may acquire other businesses
that we believe are synergistic and will ultimately increase our revenue and net income, strengthen our
ability to achieve our strategic goals, provide critical mass with existing clients, and further expand our lines
of service. We typically pay a purchase price that results in the recognition of goodwill, generally
representing the intangible value of a successful business with an assembled workforce specialized in our
areas of interest. Acquisitions are inherently risky, and no assurance can be given that our previous or
future acquisitions will be successful or will not have a material adverse effect on our financial position,
results of operations, or cash flow. All acquisitions require the approval of our Board of Directors.

On January 18, 2016, we acquired Coffey International Limited (Coffey), headquartered in

Sydney, Australia. Coffey had approximately 3,300 staff delivering technical and engineering solutions in
international development and geoscience. Coffey significantly expands our geographic presence,
particularly in Australia and Asia Pacific, and is part of our RME segment. In addition to Australia,
Coffeys international development business has operations supporting federal government agencies in the
U.S. and the United Kingdom. In the second quarter of fiscal 2016, we also acquired INDUS Corporation
(INDUS), headquartered in Vienna, Virginia. INDUS is a technology solutions firm focused on water
data analytics, geospatial analysis, secure infrastructure, and software applications management for U.S.
federal government customers, and is included in our WEI segment. In fiscal 2015, we acquired
Cornerstone Environmental Group, LLC (CEG), headquartered in Middletown, New York. CEG is an
environmental engineering and consulting firm focused on solid waste markets in the United States, and is
included in our RME segment.

16
 For detailed information regarding acquisitions, see Note 5, Mergers and Acquisitions of the
Notes to Consolidated Financial Statements included in Item 8.

Divestitures. We regularly review and evaluate our existing operations to determine whether our
business model should change through the divestiture of certain businesses. Accordingly, from time to
time, we may divest certain non-core businesses and reallocate our resources to businesses that better align
with our long-term strategic direction. We did not have any divestitures in fiscal 2016, 2015, or 2014.

Competition

The market for our services is generally competitive. We often compete with many other firms
ranging from small regional firms to large international firms.

We perform a broad spectrum of consulting, engineering, and technical services across the water,
environment, infrastructure, resource management, energy, and international development markets. Our
client base includes U.S. federal government agencies such as the DoD, USAID, DOE, EPA and the
Federal Aviation Administration; U.S. state and local government agencies; government and commercial
clients in Canada and Australia; the U.S. commercial sector, which consists primarily of large industrial
companies and utilities; and our international commercial clients. Our competition varies and is a function
of the business areas in which, and the client sectors for which, we perform our services. The number of
competitors for any procurement can vary widely, depending upon technical qualifications, the relative
value of the project, geographic location, the financial terms and risks associated with the work, and any
restrictions placed upon competition by the client. Historically, clients have chosen among competing firms
by weighing the quality, innovation and timeliness of the firms service versus its cost to determine which
firm offers the best value. When less work becomes available in certain markets, price could become an
increasingly important factor.

Our competitors vary depending on end markets and clients, and often we may only compete with
a portion of a firm. We believe that our principal competitors include the following firms, in alphabetical
order: AECOM Technology Corporation; AMEC Foster Wheeler; Arcadis NV; Black & Veatch
Corporation; Brown & Caldwell; CDM Smith Inc.; CH2M HILL Companies, Ltd.; Chemonics
International, Inc.; Exponent, Inc.; GHD; ICF International, Inc.; Jacobs Engineering Group Inc.;
Leidos, Inc.; SNC-Lavalin Group Inc.; Stantec Inc.; TRC Companies, Inc.; Weston Solutions, Inc.; Willbros
Group, Inc.; and WSP Global Inc.

Backlog

We include in our backlog only those contracts for which funding has been provided and work
authorization has been received. We estimate that approximately 70% of our backlog at the end of fiscal
2016 will be recognized as revenue in fiscal 2017, as work is being performed. However, we cannot
guarantee that the revenue projected in our backlog will be realized or, if realized, will result in profits. In
addition, project cancellations or scope adjustments may occur with respect to contracts reflected in our
backlog. For example, certain of our contracts with the U.S. federal government and other clients are
terminable at the discretion of the client, with or without cause. These types of backlog reductions could
adversely affect our revenue and margins. Accordingly, our backlog as of any particular date is an
uncertain indicator of our future earnings.

At fiscal 2016 year-end, our backlog was $2.4 billion, an increase of $477 million, or 25%,
compared to fiscal 2015 year-end. Approximately $900 million and $1.5 billion of our backlog at the end of
fiscal 2016 related to WEI and RME, respectively. The overall increase in our backlog was primarily due to
the acquisition of Coffey in the second quarter of fiscal 2016.

17
Regulations

We engage in various service activities that are subject to government oversight, including
environmental laws and regulations, general government procurement laws and regulations, and other
regulations and requirements imposed by the specific government agencies with which we conduct
business.

Environmental. A significant portion of our business involves the planning, design, program
management and construction management of pollution control facilities, as well as the assessment and
management of remediation activities at hazardous waste sites, U.S. Superfund sites, and military bases. In
addition, we contract with U.S. federal government entities to destroy hazardous materials, including
weapons stockpiles. These activities require us to manage, handle, remove, treat, transport, and dispose of
toxic or hazardous substances.

Some environmental laws, such as the U.S. Superfund law and similar state, provincial and local
statutes, can impose liability for the entire cost of clean-up for contaminated facilities or sites upon present
and former owners and operators, as well as generators, transporters, and persons arranging for the
treatment or disposal of such substances. In addition, while we strive to handle hazardous and toxic
substances with care and in accordance with safe methods, the possibility of accidents, leaks, spills, and
events of force majeure always exist. Humans exposed to these materials, including workers or
subcontractors engaged in the transportation and disposal of hazardous materials and persons in affected
areas, may be injured or become ill. This could result in lawsuits that expose us to liability and substantial
damage awards. Liabilities for contamination or human exposure to hazardous or toxic materials, or a
failure to comply with applicable regulations, could result in substantial costs, including clean-up costs,
fines, civil or criminal sanctions, third party claims for property damage or personal injury, or the cessation
of remediation activities.

Certain of our business operations are covered by U.S. Public Law 85-804, which provides for
government indemnification against claims and damages arising out of unusually hazardous activities
performed at the request of the government. Due to changes in public policies and law, however,
government indemnification may not be available in the case of any future claims or liabilities relating to
other hazardous activities that we perform.

Government Procurement. The services we provide to the U.S. federal government are subject to
the FAR and other rules and regulations applicable to government contracts. These rules and regulations:

require certification and disclosure of all cost and pricing data in connection with the contract
negotiations under certain contract types;

impose accounting rules that define allowable and unallowable costs and otherwise govern our
right to reimbursement under certain cost-based government contracts; and

restrict the use and dissemination of information classified for national security purposes and
the exportation of certain products and technical data.

In addition, services provided to the DoD are monitored by the Defense Contract Management
Agency and audited by the DCAA. Our government clients can also terminate any of their contracts, and
many of our government contracts are subject to renewal or extension annually. Further, the services we
provide to state and local government clients are subject to various government rules and regulations.

18
Seasonality

We experience seasonal trends in our business. Our revenue and operating income are typically
lower in the first half of our fiscal year, primarily due to the Thanksgiving (in the U.S.), Christmas and New
Years holidays. Many of our clients employees, as well as our own employees, take vacations during these
holiday periods. Further, seasonal inclement weather conditions occasionally cause some of our offices to
close temporarily or may hamper our project field work in the northern hemispheres temperate and arctic
regions. These occurrences result in fewer billable hours worked on projects and, correspondingly, less
revenue recognized.

Potential Liability and Insurance

Our business activities could expose us to potential liability under various laws and under
workplace health and safety regulations. In addition, we occasionally assume liability by contract under
indemnification agreements. We cannot predict the magnitude of such potential liabilities.

We maintain a comprehensive general liability insurance policy with an umbrella policy that covers
losses beyond the general liability limits. We also maintain professional errors and omissions liability and
contractors pollution liability insurance policies. We believe that both policies provide adequate coverage
for our business. When we perform higher-risk work, we obtain, if available, the necessary types of
insurance coverage for such activities, as is typically required by our clients.

We obtain insurance coverage through a broker that is experienced in our industry. The broker
and our risk manager regularly review the adequacy of our insurance coverage. Because there are various
exclusions and retentions under our policies, or an insurance carrier may become insolvent, there can be
no assurance that all potential liabilities will be covered by our insurance policies or paid by our carrier.

We evaluate the risk associated with insurance claims. If we determine that a loss is probable and
reasonably estimable, we establish an appropriate reserve. A reserve is not established if we determine that
a claim has no merit or is not probable or reasonably estimable. Our historic levels of insurance coverage
and reserves have been adequate. However, partially or completely uninsured claims, if successful and of
significant magnitude, could have a material adverse effect on our business.

Employees

At fiscal 2016 year-end, we had approximately 16,000 staff worldwide. A large percentage of our
employees have technical and professional backgrounds and undergraduate and/or advanced degrees,
including the employees of recently acquired companies. Our professional staff includes archaeologists,
architects, biologists, chemical engineers, chemists, civil engineers, computer scientists, economists,
electrical engineers, environmental engineers, environmental scientists, geologists, hydrogeologists,
mechanical engineers, oceanographers, project managers and toxicologists. We consider the current
relationships with our employees to be favorable. We are not aware of any employment circumstances that
are likely to disrupt work at any of our facilities. See Part I, Item 1A, Risk Factors for a discussion of the
risks related to the loss of key personnel or our inability to attract and retain qualified personnel.

19
Executive Officers of the Registrant

The following table shows the name, age and position of each of our executive officers at
November 22, 2016:

Name Age Position

Dan L. Batrack 58 Chairman, Chief Executive Officer and President

Mr. Batrack joined our predecessor in 1980 and was named Chairman in
January 2008. He has served as our Chief Executive Officer and a director
since November 2005, and as our President since October 2008.
Mr. Batrack has served in numerous capacities over the last 30 years,
including project scientist, project manager, operations manager, Senior
Vice President and President of an operating unit. He has managed
complex programs for many small and Fortune 500 clients, both in the
United States and internationally. Mr. Batrack holds a B.A. degree in
Business Administration from the University of Washington.

Steven M. Burdick 52 Executive Vice President, Chief Financial Officer

Mr. Burdick has served as our Executive Vice President, Chief Financial
Officer since April 2011. He served as our Senior Vice President and
Corporate Controller from January 2004 to March 2011. Mr. Burdick
joined us in April 2003 as Vice President, Management Audit. Previously,
Mr. Burdick served in financial executive management roles in private
industry and with Ernst & Young LLP. Mr. Burdick holds a B.S. degree in
Business Administration from Santa Clara University and is a Certified
Public Accountant.

Ronald J. Chu 59 Executive Vice President and President of Resource Management and
Energy

Mr. Chu has served as the President of RME since June 2007, and he has
served as the Chief Executive Officer of Coffey since January 2016. He has
more than 16 years of experience with us, and has served in various
technical and management capacities, including project and program
manager, office manager, regional manager and Chief Operating Officer
of the predecessor to RME. Mr. Chu was named a Vice President in 2001,
and has served as president of several subsidiary companies during his
tenure with us. He began his career as a civil/sanitary engineer in 1981 and
entered the environmental consulting field in 1984. His career has included
management of major assessment, engineering and remediation programs
for major oil and gas companies, Fortune 100 manufacturers, energy
suppliers, and government agencies. Mr. Chu is a registered professional
engineer in several states and has authored numerous technical articles.
He holds a B.S. in Civil Engineering from Northeastern University and an
M.S. in Environmental Engineering from the University of Southern
California.

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Name Age Position
Leslie L. Shoemaker 59 Executive Vice President and President of Water, Environment and
Infrastructure

Dr. Shoemaker was named President of WEI in April 2015.

Dr. Shoemaker joined us in 1991, and has previously served in various
management capacities, including project and program manager, water
resources manager and infrastructure group president. From 2005 to 2015,
she led our strategic planning, business development and company-wide
collaboration programs. Her technical expertise is in the management of
large-scale watershed and master planning studies, development of
modeling tools and application of optimization tools for decision making.
Dr. Shoemaker holds a B.A. degree in Mathematics from Hamilton
College, a Master of Engineering from Cornell University and a Ph.D. in
Agricultural Engineering from the University of Maryland.

William R. Brownlie 63 Senior Vice President, Chief Engineer and Corporate Risk Management
Officer

Dr. Brownlie was named Senior Vice President and Chief Engineer in
September 2009, and Corporate Risk Management Officer in November
2013. From December 2005 to September 2009, he served as a Group
President. Dr. Brownlie joined our predecessor in 1981 and was named a
Senior Vice President in December 1993. Dr. Brownlie has managed
various operating units and programs focusing on water resources and
environmental services, including work with USACE, the U.S. Air Force,
U.S. Bureau of Reclamation and DOE. He is a registered professional
engineer and has a strong technical background in water resources.
Dr. Brownlie holds B.S. and M.S. degrees in Civil Engineering from the
State University of New York at Buffalo and a Ph.D. in Civil Engineering
from the California Institute of Technology.

Brian N. Carter 49 Senior Vice President, Corporate Controller and Chief Accounting Officer

Mr. Carter joined Tetra Tech as Vice President, Corporate Controller and
Chief Accounting Officer in June 2011 and was appointed Senior Vice
President in October 2012. Previously, Mr. Carter served in finance and
auditing positions in private industry and with Ernst & Young LLP.
Mr. Carter holds a B.S. in Business Administration from Miami University
and is a Certified Public Accountant.

Craig L. Christensen 63 Senior Vice President, Chief Information Officer

Mr. Christensen joined us in 1998 through the acquisition of our Tetra

Tech NUS, Inc. (NUS) subsidiary. Mr. Christensen is responsible for our
information services and technologies, including the implementation of
our enterprise resource planning system. Previously, Mr. Christensen held
positions at NUS, Brown and Root Services, and Landmark Graphics
subsidiaries of Halliburton Company where his responsibilities included
contracts administration, finance, and system development. Prior to his
service at Halliburton, Mr. Christensen held positions at Burroughs
Corporation and Apple Computer. Mr. Christensen holds B.A. and
M.B.A. degrees from Brigham Young University.

21
Name Age Position
Richard A. Lemmon 57 Senior Vice President, Corporate Administration

Mr. Lemmon joined our predecessor in 1981 in a technical capacity and

became a member of its corporate staff in a management position in 1985.
In 1988, at the time of our predecessors divestiture from Honeywell, Inc.,
Mr. Lemmon structured and managed many of our corporate functions.
He is currently responsible for insurance, risk management, human
resources, safety and facilities.

Kevin P. McDonald 57 Senior Vice President, Human Resources and Leadership Development

Mr. McDonald joined us in 2003 through the acquisition of Foster

Wheeler Environmental Corporation. He is responsible for all areas of
human resources (HR), including executive compensation, employee
benefits, succession planning, human resources information systems, and
employment law compliance. Prior to leading our corporate HR
organization, Mr. McDonald was the HR Director for one of our
subsidiaries. He has more than 30 years experience in the engineering and
construction services industry. Mr. McDonald earned a B.S. degree in
Management from the University of Scranton and an M.B.A from
Fairleigh Dickinson University.

Janis B. Salin 63 Senior Vice President, General Counsel and Secretary

Ms. Salin joined us in February 2002. For the prior 18 years, Ms. Salin was
a Principal with the law firm of Riordan & McKinzie in Los Angeles, and
served as Managing Principal of that firm from 1990 to 1992. She served as
our outside counsel from the time of our formation in 1988. Ms. Salin
holds B.A. and J.D. degrees from the University of California at Los
Angeles.

Available Information

All of our periodic report filings with the Securities and Exchange Commission (SEC) pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act), are
made available, free of charge, through our website located at www.tetratech.com, including our Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any
amendments to these reports. These reports are available on our website as soon as reasonably practicable
after we electronically file with or furnish the reports to the SEC. You may also request an electronic or
paper copy of these filings at no cost by writing or telephoning us at the following: Tetra Tech, Inc.,
Attention: Investor Relations, 3475 East Foothill Boulevard, Pasadena, California 91107, (626) 351-4664.

Item 1A. Risk Factors

We operate in a changing environment that involves numerous known and unknown risks and
uncertainties that could materially adversely affect our operations. Set forth below and elsewhere in this report
and in other documents we file with the SEC are descriptions of the risks and uncertainties that could cause our
actual results to differ materially from the results contemplated by the forward-looking statements contained in
this report. Additional risks we do not yet know of or that we currently think are immaterial may also affect our
business operations. If any of the events or circumstances described in the following risks actually occurs, our
business, financial condition or results of operations could be materially adversely affected.

22
Continuing worldwide political and economic uncertainties may adversely affect our revenue and
profitability.

The last several years have been periodically marked by political and economic concerns, including
decreased consumer confidence, the lingering effects of international conflicts, energy costs and inflation.
Although certain indices and economic data have shown signs of stabilization in the United States and
certain global markets, there can be no assurance that these improvements will be broad-based or
sustainable. This instability can make it extremely difficult for our clients, our vendors and us to accurately
forecast and plan future business activities, and could cause constrained spending on our services, delays
and a lengthening of our business development efforts, the demand for more favorable pricing or other
terms, and/or difficulty in collection of our accounts receivable. Our government clients may face budget
deficits that prohibit them from funding proposed and existing projects. Further, ongoing economic
instability in the global markets could limit our ability to access the capital markets at a time when we
would like, or need, to raise capital, which could have an impact on our ability to react to changing business
conditions or new opportunities. If economic conditions remain uncertain or weaken, or government
spending is reduced, our revenue and profitability could be adversely affected.

Demand for our services is cyclical and vulnerable to economic downturns. If economic growth slows,
government fiscal conditions worsen, or client spending declines further, then our revenue, profits and
financial condition may deteriorate.

Demand for our services is cyclical, and vulnerable to economic downturns and reductions in
government and private industry spending. Such downturns or reductions may result in clients delaying,
curtailing or canceling proposed and existing projects. Our business traditionally lags the overall recovery
in the economy; therefore, our business may not recover immediately when the economy improves. If
economic growth slows, government fiscal conditions worsen, or client spending declines, then our
revenue, profits and overall financial condition may deteriorate. Our government clients may face budget
deficits that prohibit them from funding new or existing projects. In addition, our existing and potential
clients may either postpone entering into new contracts or request price concessions. Difficult financing
and economic conditions may cause some of our clients to demand better pricing terms or delay payments
for services we perform, thereby increasing the average number of days our receivables are outstanding,
and the potential of increased credit losses of uncollectible invoices. Further, these conditions may result in
the inability of some of our clients to pay us for services that we have already performed. If we are not able
to reduce our costs quickly enough to respond to the revenue decline from these clients, our operating
results may be adversely affected. Accordingly, these factors affect our ability to forecast our future
revenue and earnings from business areas that may be adversely impacted by market conditions.

Demand for our oil and gas, and mining services fluctuates and a decline in demand could adversely affect
our revenue, profits and financial condition.

Demand for our oil and gas services fluctuates, and we depend on our customers willingness to
make future expenditures to explore for, develop, produce and transport oil and natural gas in the United
States and Canada. Our customers willingness to undertake these activities depends largely upon
prevailing industry conditions that are influenced by numerous factors over which we have no control,
including:

prices, and expectations about future prices, of oil and natural gas;

domestic and foreign supply of and demand for oil and natural gas;

the cost of exploring for, developing, producing and delivering oil and natural gas;

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 transportation capacity, including but not limited to train transportation capacity and its future
regulation;

available pipeline, storage and other transportation capacity;

availability of qualified personnel and lead times associated with acquiring equipment and
products;

federal, state, provincial and local regulation of oilfield activities;

environmental concerns regarding the methods our customers use to produce hydrocarbons;

the availability of water resources and the cost of disposal and recycling services; and

seasonal limitations on access to work locations.

Anticipated future prices for natural gas and crude oil are a primary factor affecting spending by
our customers. Lower prices or volatility in prices for oil and natural gas typically decrease spending, which
can cause rapid and material declines in demand for our services and in the prices we are able to charge for
our services. Worldwide political, economic, military and terrorist events, as well as natural disasters and
other factors beyond our control, contribute to oil and natural gas price levels and volatility and are likely
to continue to do so in the future.

Further, the businesses of our global mining clients are, to varying degrees, cyclical and have
experienced declines over the last three years due to lower global growth expectations and the associated
decline in market prices. For example, depending on the market prices of uranium, precious metals,
aluminum, copper, iron ore, and potash, our mining company clients may cancel or curtail their mining
projects, which could result in a corresponding decline in the demand for our services among these clients.
Accordingly, the cyclical nature of the mining industry could adversely affect our business, operating
results or financial condition.

Our international operations expose us to legal, political, and economic risks in different countries as well
as currency exchange rate fluctuations that could harm our business and financial results.

In fiscal 2016, we generated 28.1% of our revenue from our international operations, primarily in
Canada and Australia, and from international clients for work that is performed by our domestic
operations. International business is subject to a variety of risks, including:

imposition of governmental controls and changes in laws, regulations, or policies;

lack of developed legal systems to enforce contractual rights;

greater risk of uncollectible accounts and longer collection cycles;

currency exchange rate fluctuations, devaluations, and other conversion restrictions;

uncertain and changing tax rules, regulations, and rates;

the potential for civil unrest, acts of terrorism, force majeure, war or other armed conflict, and
greater physical security risks, which may cause us to leave a country quickly;

logistical and communication challenges;

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 changes in regulatory practices, including tariffs and taxes;

changes in labor conditions;

general economic, political, and financial conditions in foreign markets; and

exposure to civil or criminal liability under the U.S. Foreign Corrupt Practices Act (FCPA),
the U.K. Bribery Act, the Canadian Corruption of Foreign Public Officials Act, the Brazilian
Clean Companies Act, the anti-boycott rules, trade and export control regulations, as well as
other international regulations.

For example, an ongoing government investigation into political corruption in Quebec contributed
to the slow-down in procurements and business activity in that province, which adversely affected our
business. The Province of Quebec has adopted legislation that requires businesses and individuals seeking
contracts with governmental bodies be certified by a Quebec regulatory authority for contracts over a
specified size. Our failure to maintain certification could adversely affect our business.

International risks and violations of international regulations may significantly reduce our revenue
and profits, and subject us to criminal or civil enforcement actions, including fines, suspensions, or
disqualification from future U.S. federal procurement contracting. Although we have policies and
procedures to monitor legal and regulatory compliance, our employees, subcontractors, and agents could
take actions that violate these requirements. As a result, our international risk exposure may be more or
less than the percentage of revenue attributed to our international operations.

We derive a substantial amount of our revenue from U.S. federal, state and local government agencies, and
any disruption in government funding or in our relationship with those agencies could adversely affect our
business.

In fiscal 2016, we generated 42.4% of our revenue from contracts with U.S. federal, and state and
local government agencies. A significant amount of this revenue is derived under multi-year contracts,
many of which are appropriated on an annual basis. As a result, at the beginning of a project, the related
contract may be only partially funded, and additional funding is normally committed only as appropriations
are made in each subsequent year. These appropriations, and the timing of payment of appropriated
amounts, may be influenced by numerous factors as noted below. Our backlog includes only the projects
that have funding appropriated.

The demand for our U.S. government-related services is generally driven by the level of
government program funding. Accordingly, the success and further development of our business depends,
in large part, upon the continued funding of these U.S. government programs, and upon our ability to
obtain contracts and perform well under these programs. Under the Budget Control Act of 2011, an
automatic sequestration process, or across-the-board budget cuts (a large portion of which was defense-
related), was triggered when the Joint Select Committee on Deficit Reduction, a committee of twelve
members of Congress, failed to agree on a deficit reduction plan for the U.S. federal budget. The
sequestration began on March 1, 2013. Although the Bipartisan Budget Act of 2013 provided some
sequester relief through the end of fiscal year 2015, the sequestration requires reduced U.S. federal
government spending from fiscal year 2016 through fiscal year 2021. A significant reduction in federal
government spending or a change in budgetary priorities could reduce demand for our services, cancel or
delay federal projects, and result in the closure of federal facilities and significant personnel reductions.

There are several additional factors that could materially affect our U.S. government contracting
business, which could cause U.S. government agencies to delay or cancel programs, to reduce their orders
under existing contracts, to exercise their rights to terminate contracts or not to exercise contract options

25
for renewals or extensions. Such factors, which include the following, could have a material adverse effect
on our revenue or the timing of contract payments from U.S. government agencies:

the failure of the U.S. government to complete its budget and appropriations process before its
fiscal year-end, which would result in the funding of government operations by means of a
continuing resolution that authorizes agencies to continue to operate but does not authorize
new spending initiatives. As a result, U.S. government agencies may delay the procurement of
services;

changes in and delays or cancellations of government programs, requirements or

appropriations;

budget constraints or policy changes resulting in delay or curtailment of expenditures related to

the services we provide;

re-competes of government contracts;

the timing and amount of tax revenue received by federal, and state and local governments, and
the overall level of government expenditures;

curtailment in the use of government contracting firms;

delays associated with insufficient numbers of government staff to oversee contracts;

the increasing preference by government agencies for contracting with small and disadvantaged
businesses;

competing political priorities and changes in the political climate with regard to the funding or
operation of the services we provide;

the adoption of new laws or regulations affecting our contracting relationships with the federal,
state or local governments;

unsatisfactory performance on government contracts by us or one of our subcontractors,

negative government audits or other events that may impair our relationship with federal, state
or local governments;

a dispute with or improper activity by any of our subcontractors; and

general economic or political conditions.

Our inability to win or renew U.S. government contracts during regulated procurement processes could
harm our operations and significantly reduce or eliminate our profits.

U.S. government contracts are awarded through a regulated procurement process. The U.S.
federal government has increasingly relied upon multi-year contracts with pre-established terms and
conditions, such as indefinite delivery/indefinite quantity (IDIQ) contracts, which generally require
those contractors who have previously been awarded the IDIQ to engage in an additional competitive
bidding process before a task order is issued. As a result, new work awards tend to be smaller and of
shorter duration, since the orders represent individual tasks rather than large, programmatic assignments.
In addition, we believe that there has been an increase in the award of federal contracts based on a
low-price, technically acceptable criteria emphasizing price over qualitative factors, such as past

26
performance. As a result, pricing pressure may reduce our profit margins on future federal contracts. The
increased competition and pricing pressure, in turn, may require us to make sustained efforts to reduce
costs in order to realize revenue, and profits under government contracts. If we are not successful in
reducing the amount of costs we incur, our profitability on government contracts will be negatively
impacted. In addition, the U.S. federal government has scaled back outsourcing of services in favor of
insourcing jobs to its employees, which could reduce our revenue. Moreover, even if we are qualified to
work on a government contract, we may not be awarded the contract because of existing government
policies designed to protect small businesses and under-represented minority contractors. Our inability to
win or renew government contracts during regulated procurement processes could harm our operations
and significantly reduce or eliminate our profits.

Each year, client funding for some of our U.S. government contracts may rely on government appropriations
or public-supported financing. If adequate public funding is delayed or is not available, then our profits and
revenue could decline.

Each year, client funding for some of our U.S. government contracts may directly or indirectly rely
on government appropriations or public-supported financing. Legislatures may appropriate funds for a
given project on a year-by-year basis, even though the project may take more than one year to perform. In
addition, public-supported financing such as U.S. state and local municipal bonds may be only partially
raised to support existing projects. Similarly, the impact of the economic downturn on U.S. state and local
governments may make it more difficult for them to fund projects. In addition to the state of the economy
and competing political priorities, public funds and the timing of payment of these funds may be influenced
by, among other things, curtailments in the use of government contracting firms, increases in raw material
costs, delays associated with insufficient numbers of government staff to oversee contracts, budget
constraints, the timing and amount of tax receipts, and the overall level of government expenditures. If
adequate public funding is not available or is delayed, then our profits and revenue could decline.

Our U.S. federal government contracts may give government agencies the right to modify, delay, curtail,
renegotiate, or terminate existing contracts at their convenience at any time prior to their completion, which
may result in a decline in our profits and revenue.

U.S. federal government projects in which we participate as a contractor or subcontractor may

extend for several years. Generally, government contracts include the right to modify, delay, curtail,
renegotiate, or terminate contracts and subcontracts at the governments convenience any time prior to
their completion. Any decision by a U.S. federal government client to modify, delay, curtail, renegotiate, or
terminate our contracts at their convenience may result in a decline in our profits and revenue.

As a U.S. government contractor, we must comply with various procurement laws and regulations and are
subject to regular government audits; a violation of any of these laws and regulations or the failure to pass a
government audit could result in sanctions, contract termination, forfeiture of profit, harm to our
reputation or loss of our status as an eligible government contractor and could reduce our profits and
revenue.

We must comply with and are affected by U.S. federal, state, local, and foreign laws and
regulations relating to the formation, administration and performance of government contracts. For
example, we must comply with FAR, the Truth in Negotiations Act, CAS, the American Recovery and
Reinvestment Act of 2009, the Services Contract Act, and the DoD security regulations, as well as many
other rules and regulations. In addition, we must also comply with other government regulations related to
employment practices, environmental protection, health and safety, tax, accounting, and anti-fraud
measures, as well as many others regulations in order to maintain our government contractor status. These
laws and regulations affect how we do business with our clients and, in some instances, impose additional
costs on our business operations. Although we take precautions to prevent and deter fraud, misconduct,

27
and non-compliance, we face the risk that our employees or outside partners may engage in misconduct,
fraud, or other improper activities. U.S. government agencies, such as the DCAA, routinely audit and
investigate government contractors. These government agencies review and audit a government
contractors performance under its contracts and cost structure, and evaluate compliance with applicable
laws, regulations, and standards. In addition, during the course of its audits, the DCAA may question our
incurred project costs. If the DCAA believes we have accounted for such costs in a manner inconsistent
with the requirements for FAR or CAS, the DCAA auditor may recommend to our U.S. government
corporate administrative contracting officer that such costs be disallowed. Historically, we have not
experienced significant disallowed costs as a result of government audits. However, we can provide no
assurance that the DCAA or other government audits will not result in material disallowances for incurred
costs in the future. In addition, U.S. government contracts are subject to various other requirements
relating to the formation, administration, performance, and accounting for these contracts. We may also be
subject to qui tam litigation brought by private individuals on behalf of the U.S. government under the
Federal Civil False Claims Act, which could include claims for treble damages. U.S. government contract
violations could result in the imposition of civil and criminal penalties or sanctions, contract termination,
forfeiture of profit, and/or suspension of payment, any of which could make us lose our status as an eligible
government contractor. We could also suffer serious harm to our reputation. Any interruption or
termination of our U.S. government contractor status could reduce our profits and revenue significantly.

If we extend a significant portion of our credit to clients in a specific geographic area or industry, we may
experience disproportionately high levels of collection risk and nonpayment if those clients are adversely
affected by factors particular to their geographic area or industry.

Our clients include public and private entities that have been, and may continue to be, negatively
impacted by the changing landscape in the global economy. While outside of the U.S. federal government
no one client accounted for over 10% of our revenue for fiscal 2016, we face collection risk as a normal
part of our business where we perform services and subsequently bill our clients for such services. In the
event that we have concentrated credit risk from clients in a specific geographic area or industry,
continuing negative trends or a worsening in the financial condition of that specific geographic area or
industry could make us susceptible to disproportionately high levels of default by those clients. Such
defaults could materially adversely impact our revenues and our results of operations.

We have made and expect to continue to make acquisitions that could disrupt our operations and adversely
impact our business and operating results. Our failure to conduct due diligence effectively, or our inability
to successfully integrate acquisitions, could impede us from realizing all of the benefits of the acquisitions,
which could weaken our results of operations.

A key part of our growth strategy is to acquire other companies that complement our lines of
business or that broaden our technical capabilities and geographic presence. We expect to continue to
acquire companies as an element of our growth strategy; however, our ability to make acquisitions is
restricted under our credit agreement. Acquisitions involve certain known and unknown risks that could
cause our actual growth or operating results to differ from our expectations or the expectations of
securities analysts. For example:

we may not be able to identify suitable acquisition candidates or to acquire additional

companies on acceptable terms;

we are pursuing international acquisitions, which inherently pose more risk than domestic
acquisitions;

we compete with others to acquire companies, which may result in decreased availability of, or
increased price for, suitable acquisition candidates;

28
 we may not be able to obtain the necessary financing, on favorable terms or at all, to finance any
of our potential acquisitions;

we may ultimately fail to consummate an acquisition even if we announce that we plan to

acquire a company; and

acquired companies may not perform as we expect, and we may fail to realize anticipated
revenue and profits.

In addition, our acquisition strategy may divert managements attention away from our existing
businesses, resulting in the loss of key clients or key employees, and expose us to unanticipated problems
or legal liabilities, including responsibility as a successor-in-interest for undisclosed or contingent liabilities
of acquired businesses or assets.

If we fail to conduct due diligence on our potential targets effectively, we may, for example, not
identify problems at target companies, or fail to recognize incompatibilities or other obstacles to successful
integration. Our inability to successfully integrate future acquisitions could impede us from realizing all of
the benefits of those acquisitions and could severely weaken our business operations. The integration
process may disrupt our business and, if implemented ineffectively, may preclude realization of the full
benefits expected by us and could harm our results of operations. In addition, the overall integration of the
combining companies may result in unanticipated problems, expenses, liabilities, and competitive
responses, and may cause our stock price to decline. The difficulties of integrating an acquisition include,
among others:

issues in integrating information, communications, and other systems;

incompatibility of logistics, marketing, and administration methods;

maintaining employee morale and retaining key employees;

integrating the business cultures of both companies;

preserving important strategic client relationships;

consolidating corporate and administrative infrastructures, and eliminating duplicative

operations; and

coordinating and integrating geographically separate organizations.

In addition, even if the operations of an acquisition are integrated successfully, we may not realize
the full benefits of the acquisition, including the synergies, cost savings or growth opportunities that we
expect. These benefits may not be achieved within the anticipated time frame, or at all.

Further, acquisitions may cause us to:

issue common stock that would dilute our current stockholders ownership percentage;

use a substantial portion of our cash resources;

increase our interest expense, leverage, and debt service requirements (if we incur additional
debt to pay for an acquisition);

29
 assume liabilities, including environmental liabilities, for which we do not have indemnification
from the former owners. Further, indemnification obligations may be subject to dispute or
concerns regarding the creditworthiness of the former owners;

record goodwill and non-amortizable intangible assets that are subject to impairment testing
and potential impairment charges;

experience volatility in earnings due to changes in contingent consideration related to

acquisition earn-out liability estimates;

incur amortization expenses related to certain intangible assets;

lose existing or potential contracts as a result of conflict of interest issues;

incur large and immediate write-offs; or

become subject to litigation.

Finally, acquired companies that derive a significant portion of their revenue from the U.S. federal
government and do not follow the same cost accounting policies and billing practices that we follow may be
subject to larger cost disallowances for greater periods than we typically encounter. If we fail to determine
the existence of unallowable costs and do not establish appropriate reserves in advance of an acquisition,
we may be exposed to material unanticipated liabilities, which could have a material adverse effect on our
business.

If our goodwill or other intangible assets become impaired, then our profits may be significantly reduced.

Because we have historically acquired a significant number of companies, goodwill and other
intangible assets represent a substantial portion of our assets. As of October 2, 2016, our goodwill was
$718 million and other intangible assets were $49 million. We are required to perform a goodwill
impairment test for potential impairment at least on an annual basis. We also assess the recoverability of
the unamortized balance of our intangible assets when indications of impairment are present based on
expected future profitability and undiscounted expected cash flows and their contribution to our overall
operations. The goodwill impairment test requires us to determine the fair value of our reporting units,
which are the components one level below our reportable segments. In determining fair value, we make
significant judgments and estimates, including assumptions about our strategic plans with regard to our
operations. We also analyze current economic indicators and market valuations to help determine fair
value. To the extent economic conditions that would impact the future operations of our reporting units
change, our goodwill may be deemed to be impaired, and we would be required to record a non-cash
charge that could result in a material adverse effect on our financial position or results of operations.

For example, we wrote-off all of our Global Mining Practices (GMP) goodwill and identifiable
intangible assets and recorded a related impairment charge of $60.8 million ($57.3 million after-tax) in the
fourth quarter of fiscal 2015. We had no goodwill impairment in fiscal 2016.

We could be adversely affected by violations of the FCPA and similar worldwide anti-bribery laws.

The FCPA and similar anti-bribery laws generally prohibit companies and their intermediaries
from making improper payments to foreign government officials for the purpose of obtaining or retaining
business. The U.K. Bribery Act of 2010 prohibits both domestic and international bribery, as well as
bribery across both private and public sectors. In addition, an organization that fails to prevent bribery
by anyone associated with the organization can be charged under the U.K. Bribery Act unless the

30
organization can establish the defense of having implemented adequate procedures to prevent bribery.
Improper payments are also prohibited under the Canadian Corruption of Foreign Public Officials Act and
the Brazilian Clean Companies Act. Practices in the local business community of many countries outside
the United States have a level of government corruption that is greater than that found in the developed
world. Our policies mandate compliance with these anti-bribery laws, and we have established policies and
procedures designed to monitor compliance with these anti-bribery law requirements; however, we cannot
ensure that our policies and procedures will protect us from potential reckless or criminal acts committed
by individual employees or agents. If we are found to be liable for anti-bribery law violations, we could
suffer from criminal or civil penalties or other sanctions that could have a material adverse effect on our
business.

We could be adversely impacted if we fail to comply with domestic and international export laws.

To the extent we export technical services, data and products outside of the United States, we are
subject to U.S. and international laws and regulations governing international trade and exports, including
but not limited to the International Traffic in Arms Regulations, the Export Administration Regulations,
and trade sanctions against embargoed countries. A failure to comply with these laws and regulations could
result in civil or criminal sanctions, including the imposition of fines, the denial of export privileges, and
suspension or debarment from participation in U.S. government contracts, which could have a material
adverse effect on our business.

If we fail to complete a project in a timely manner, miss a required performance standard, or otherwise fail
to adequately perform on a project, then we may incur a loss on that project, which may reduce or eliminate
our overall profitability.

Our engagements often involve large-scale, complex projects. The quality of our performance on
such projects depends in large part upon our ability to manage the relationship with our clients and our
ability to effectively manage the project and deploy appropriate resources, including third-party
contractors and our own personnel, in a timely manner. We may commit to a client that we will complete a
project by a scheduled date. We may also commit that a project, when completed, will achieve specified
performance standards. If the project is not completed by the scheduled date or fails to meet required
performance standards, we may either incur significant additional costs or be held responsible for the costs
incurred by the client to rectify damages due to late completion or failure to achieve the required
performance standards. The uncertainty of the timing of a project can present difficulties in planning the
amount of personnel needed for the project. If the project is delayed or canceled, we may bear the cost of
an underutilized workforce that was dedicated to fulfilling the project. In addition, performance of projects
can be affected by a number of factors beyond our control, including unavoidable delays from government
inaction, public opposition, inability to obtain financing, weather conditions, unavailability of vendor
materials, changes in the project scope of services requested by our clients, industrial accidents,
environmental hazards, and labor disruptions. To the extent these events occur, the total costs of the
project could exceed our estimates, and we could experience reduced profits or, in some cases, incur a loss
on a project, which may reduce or eliminate our overall profitability. Further, any defects or errors, or
failures to meet our clients expectations, could result in claims for damages against us. Failure to meet
performance standards or complete performance on a timely basis could also adversely affect our
reputation.

The loss of key personnel or our inability to attract and retain qualified personnel could impair our ability
to provide services to our clients and otherwise conduct our business effectively.

As primarily a professional and technical services company, we are labor-intensive and, therefore,
our ability to attract, retain, and expand our senior management and our professional and technical staff is
an important factor in determining our future success. The market for qualified scientists and engineers is

31
competitive and, from time to time, it may be difficult to attract and retain qualified individuals with the
required expertise within the timeframe demanded by our clients. For example, some of our U.S.
government contracts may require us to employ only individuals who have particular government security
clearance levels. In addition, we rely heavily upon the expertise and leadership of our senior management.
If we are unable to retain executives and other key personnel, the roles and responsibilities of those
employees will need to be filled, which may require that we devote time and resources to identify, hire, and
integrate new employees. With limited exceptions, we do not have employment agreements with any of our
key personnel. The loss of the services of any of these key personnel could adversely affect our business.
Although we have obtained non-compete agreements from certain principals and stockholders of
companies we have acquired, we generally do not have non-compete or employment agreements with key
employees who were once equity holders of these companies. Further, many of our non-compete
agreements have expired. We do not maintain key-man life insurance policies on any of our executive
officers or senior managers. Our failure to attract and retain key individuals could impair our ability to
provide services to our clients and conduct our business effectively.

Our revenue and growth prospects may be harmed if we or our employees are unable to obtain government
granted eligibility or other qualifications we and they need to perform services for our customers.

A number of government programs require contractors to have certain kinds of government

granted eligibility, such as security clearance credentials. Depending on the project, eligibility can be
difficult and time-consuming to obtain. If we or our employees are unable to obtain or retain the necessary
eligibility, we may not be able to win new business, and our existing customers could terminate their
contracts with us or decide not to renew them. To the extent we cannot obtain or maintain the required
security clearances for our employees working on a particular contract, we may not derive the revenue or
profit anticipated from such contract.

Our actual business and financial results could differ from the estimates and assumptions that we use to
prepare our financial statements, which may significantly reduce or eliminate our profits.

To prepare financial statements in conformity with generally accepted accounting principles in the
United States of America (GAAP), management is required to make estimates and assumptions as of
the date of the financial statements. These estimates and assumptions affect the reported values of assets,
liabilities, revenue and expenses, as well as disclosures of contingent assets and liabilities. For example, we
typically recognize revenue over the life of a contract based on the proportion of costs incurred to date
compared to the total costs estimated to be incurred for the entire project. Areas requiring significant
estimates by our management include:

the application of the percentage-of-completion method of accounting and revenue recognition

on contracts, change orders, and contract claims, including related unbilled accounts receivable;

unbilled accounts receivable, including amounts related to requests for equitable adjustment to
contracts that provide for price redetermination, primarily with the U.S. federal government.
These amounts are recorded only when they can be reliably estimated and realization is
probable;

provisions for uncollectible receivables, client claims, and recoveries of costs from
subcontractors, vendors, and others;

provisions for income taxes, research and development tax credits, valuation allowances, and
unrecognized tax benefits;

value of goodwill and recoverability of other intangible assets;

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 valuations of assets acquired and liabilities assumed in connection with business combinations;

valuation of contingent earn-out liabilities recorded in connection with business combinations;

valuation of employee benefit plans;

valuation of stock-based compensation expense; and

accruals for estimated liabilities, including litigation and insurance reserves.

Our actual business and financial results could differ from those estimates, which may significantly
reduce or eliminate our profits.

Our profitability could suffer if we are not able to maintain adequate utilization of our workforce.

The cost of providing our services, including the extent to which we utilize our workforce, affects
our profitability. The rate at which we utilize our workforce is affected by a number of factors, including:

our ability to transition employees from completed projects to new assignments and to hire and
assimilate new employees;

our ability to forecast demand for our services and thereby maintain an appropriate headcount
in each of our geographies and workforces;

our ability to manage attrition;

our need to devote time and resources to training, business development, professional
development, and other non-chargeable activities; and

our ability to match the skill sets of our employees to the needs of the marketplace.

If we over-utilize our workforce, our employees may become disengaged, which could impact
employee attrition. If we under-utilize our workforce, our profit margin and profitability could suffer.

Our use of the percentage-of-completion method of revenue recognition could result in a reduction or
reversal of previously recorded revenue and profits.

We account for most of our contracts on the percentage-of-completion method of revenue

recognition. Generally, our use of this method results in recognition of revenue and profit ratably over the
life of the contract, based on the proportion of costs incurred to date to total costs expected to be incurred
for the entire project. The effects of revisions to estimated revenue and costs, including the achievement of
award fees and the impact of change orders and claims, are recorded when the amounts are known and can
be reasonably estimated. Such revisions could occur in any period and their effects could be material.
Although we have historically made reasonably reliable estimates of the progress towards completion of
long-term contracts, the uncertainties inherent in the estimating process make it possible for actual costs to
vary materially from estimates, including reductions or reversals of previously recorded revenue and profit.

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If we are unable to accurately estimate and control our contract costs, then we may incur losses on our
contracts, which could decrease our operating margins and reduce our profits. In particular, our fixed-price
contracts could increase the unpredictability of our earnings.

It is important for us to accurately estimate and control our contract costs so that we can maintain
positive operating margins and profitability. We generally enter into three principal types of contracts with
our clients: fixed-price, time-and-materials and cost-plus.

The U.S. federal government and some clients have increased the use of fixed-priced contracts.
Under fixed-price contracts, we receive a fixed price irrespective of the actual costs we incur and,
consequently, we are exposed to a number of risks. We realize a profit on fixed-price contracts only if we
can control our costs and prevent cost over-runs on our contracts. Fixed-price contracts require cost and
scheduling estimates that are based on a number of assumptions, including those about future economic
conditions, costs, and availability of labor, equipment and materials, and other exigencies. We could
experience cost over-runs if these estimates are originally inaccurate as a result of errors or ambiguities in
the contract specifications, or become inaccurate as a result of a change in circumstances following the
submission of the estimate due to, among other things, unanticipated technical problems, difficulties in
obtaining permits or approvals, changes in local laws or labor conditions, weather delays, changes in the
costs of raw materials, or the inability of our vendors or subcontractors to perform. If cost overruns occur,
we could experience reduced profits or, in some cases, a loss for that project. If a project is significant, or if
there are one or more common issues that impact multiple projects, costs overruns could increase the
unpredictability of our earnings, as well as have a material adverse impact on our business and earnings.

Under our time-and-materials contracts, we are paid for labor at negotiated hourly billing rates
and also paid for other expenses. Profitability on these contracts is driven by billable headcount and cost
control. Many of our time-and-materials contracts are subject to maximum contract values and,
accordingly, revenue relating to these contracts is recognized as if these contracts were fixed-price
contracts. Under our cost-plus contracts, some of which are subject to contract ceiling amounts, we are
reimbursed for allowable costs and fees, which may be fixed or performance-based. If our costs exceed the
contract ceiling or are not allowable under the provisions of the contract or any applicable regulations, we
may not be able to obtain reimbursement for all of the costs we incur.

Profitability on our contracts is driven by billable headcount and our ability to manage our
subcontractors, vendors, and material suppliers. If we are unable to accurately estimate and manage our
costs, we may incur losses on our contracts, which could decrease our operating margins and significantly
reduce or eliminate our profits. Certain of our contracts require us to satisfy specific design, engineering,
procurement, or construction milestones in order to receive payment for the work completed or equipment
or supplies procured prior to achievement of the applicable milestone. As a result, under these types of
arrangements, we may incur significant costs or perform significant amounts of services prior to receipt of
payment. If a client determines not to proceed with the completion of the project or if the client defaults
on its payment obligations, we may face difficulties in collecting payment of amounts due to us for the costs
previously incurred or for the amounts previously expended to purchase equipment or supplies.

Accounting for a contract requires judgments relative to assessing the contracts estimated risks,
revenue, costs, and other technical issues. Due to the size and nature of many of our contracts, the
estimation of overall risk, revenue, and cost at completion is complicated and subject to many variables.
Changes in underlying assumptions, circumstances, or estimates may also adversely affect future period
financial performance. If we are unable to accurately estimate the overall revenue or costs on a contract,
then we may experience a lower profit or incur a loss on the contract.

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Our failure to adequately recover on claims brought by us against clients for additional contract costs could
have a negative impact on our liquidity and profitability.

We have brought claims against clients for additional costs exceeding the contract price or for
amounts not included in the original contract price. These types of claims occur due to matters such as
client-caused delays or changes from the initial project scope, both of which may result in additional cost.
Often, these claims can be the subject of lengthy arbitration or litigation proceedings, and it is difficult to
accurately predict when these claims will be fully resolved. When these types of events occur and
unresolved claims are pending, we have used working capital in projects to cover cost overruns pending the
resolution of the relevant claims. A failure to promptly recover on these types of claims could have a
negative impact on our liquidity and profitability. Total accounts receivable at October 2, 2016 included
approximately $45 million related to such claims.

Our failure to win new contracts and renew existing contracts with private and public sector clients could
adversely affect our profitability.

Our business depends on our ability to win new contracts and renew existing contracts with private
and public sector clients. Contract proposals and negotiations are complex and frequently involve a lengthy
bidding and selection process, which is affected by a number of factors. These factors include market
conditions, financing arrangements, and required governmental approvals. For example, a client may
require us to provide a bond or letter of credit to protect the client should we fail to perform under the
terms of the contract. If negative market conditions arise, or if we fail to secure adequate financial
arrangements or the required government approval, we may not be able to pursue particular projects,
which could adversely affect our profitability.

If we are not able to successfully manage our growth strategy, our business and results of operations may be
adversely affected.

Our expected future growth presents numerous managerial, administrative, operational, and other
challenges. Our ability to manage the growth of our operations will require us to continue to improve our
management information systems and our other internal systems and controls. In addition, our growth will
increase our need to attract, develop, motivate, and retain both our management and professional
employees. The inability to effectively manage our growth or the inability of our employees to achieve
anticipated performance could have a material adverse effect on our business.

Our backlog is subject to cancellation, unexpected adjustments and economic conditions, and is an
uncertain indicator of future operating results.

Our backlog at October 2, 2016 was $2.4 billion, an increase of $477 million, or 25% compared to
the end of fiscal 2015. We include in backlog only those contracts for which funding has been provided and
work authorizations have been received. We cannot guarantee that the revenue projected in our backlog
will be realized or, if realized, will result in profits. In addition, project cancellations or scope adjustments
may occur, from time to time, with respect to contracts reflected in our backlog. For example, certain of
our contracts with the U.S. federal government and other clients are terminable at the discretion of the
client, with or without cause. These types of backlog reductions could adversely affect our revenue and
margins. As a result of these factors, our backlog as of any particular date is an uncertain indicator of our
future earnings.

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Cyber security breaches of our systems and information technology could adversely impact our ability to
operate.

We develop, install and maintain information technology systems for ourselves, as well as for
customers. Client contracts for the performance of information technology services, as well as various
privacy and securities laws, require us to manage and protect sensitive and confidential information,
including federal and other government information, from disclosure. We also need to protect our own
internal trade secrets and other business confidential information from disclosure. We face the threat to
our computer systems of unauthorized access, computer hackers, computer viruses, malicious code,
organized cyber-attacks and other security problems and system disruptions, including possible
unauthorized access to our and our clients proprietary or classified information. We rely on industry-
accepted security measures and technology to securely maintain all confidential and proprietary
information on our information systems. We have devoted and will continue to devote significant resources
to the security of our computer systems, but they may still be vulnerable to these threats. A user who
circumvents security measures could misappropriate confidential or proprietary information, including
information regarding us, our personnel and/or our clients, or cause interruptions or malfunctions in
operations. As a result, we may be required to expend significant resources to protect against the threat of
these system disruptions and security breaches or to alleviate problems caused by these disruptions and
breaches. Any of these events could damage our reputation and have a material adverse effect on our
business, financial condition, results of operations and cash flows.

If our business partners fail to perform their contractual obligations on a project, we could be exposed to
legal liability, loss of reputation and profit reduction or loss on the project.

We routinely enter into subcontracts and, occasionally, joint ventures, teaming arrangements, and
other contractual arrangements so that we can jointly bid and perform on a particular project. Success
under these arrangements depends in large part on whether our business partners fulfill their contractual
obligations satisfactorily. In addition, when we operate through a joint venture in which we are a minority
holder, we have limited control over many project decisions, including decisions related to the joint
ventures internal controls, which may not be subject to the same internal control procedures that we
employ. If these unaffiliated third parties do not fulfill their contract obligations, the partnerships or joint
ventures may be unable to adequately perform and deliver their contracted services. Under these
circumstances, we may be obligated to pay financial penalties, provide additional services to ensure the
adequate performance and delivery of the contracted services, and may be jointly and severally liable for
the others actions or contract performance. These additional obligations could result in reduced profits
and revenues or, in some cases, significant losses for us with respect to the joint venture, which could also
affect our reputation in the industries we serve.

If our contractors and subcontractors fail to satisfy their obligations to us or other parties, or if we are
unable to maintain these relationships, our revenue, profitability, and growth prospects could be adversely
affected.

We depend on contractors and subcontractors in conducting our business. There is a risk that we
may have disputes with our subcontractors arising from, among other things, the quality and timeliness of
work performed by the subcontractor, client concerns about the subcontractor, or our failure to extend
existing task orders or issue new task orders under a subcontract. In addition, if a subcontractor fails to
deliver on a timely basis the agreed-upon supplies, fails to perform the agreed-upon services, or goes out of
business, then we may be required to purchase the services or supplies from another source at a higher
price, and our ability to fulfill our obligations as a prime contractor may be jeopardized. This may reduce
the profit to be realized or result in a loss on a project for which the services or supplies are needed.

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 We also rely on relationships with other contractors when we act as their subcontractor or joint
venture partner. The absence of qualified subcontractors with which we have a satisfactory relationship
could adversely affect the quality of our service and our ability to perform under some of our contracts.
Our future revenue and growth prospects could be adversely affected if other contractors eliminate or
reduce their subcontracts or teaming arrangement relationships with us, or if a government agency
terminates or reduces these other contractors programs, does not award them new contracts, or refuses to
pay under a contract.

Our failure to meet contractual schedule or performance requirements that we have guaranteed could
adversely affect our operating results.

In certain circumstances, we can incur liquidated or other damages if we do not achieve project
completion by a scheduled date. If we or an entity for which we have provided a guarantee subsequently
fails to complete the project as scheduled and the matter cannot be satisfactorily resolved with the client,
we may be responsible for cost impacts to the client resulting from any delay or the cost to complete the
project. Our costs generally increase from schedule delays and/or could exceed our projections for a
particular project. In addition, project performance can be affected by a number of factors beyond our
control, including unavoidable delays from governmental inaction, public opposition, inability to obtain
financing, weather conditions, unavailability of vendor materials, changes in the project scope of services
requested by our clients, industrial accidents, environmental hazards, labor disruptions and other factors.
As a result, material performance problems for existing and future contracts could cause actual results of
operations to differ from those anticipated by us and also could cause us to suffer damage to our
reputation within our industry and client base.

New legal requirements could adversely affect our operating results.

Our business and results of operations could be adversely affected by U.S. health care reform,
climate change, defense, environmental and infrastructure industry specific and other legislation and
regulations. We are continually assessing the impact that health care reform could have on our employer-
sponsored medical plans. Growing concerns about climate change may result in the imposition of
additional environmental regulations. For example, legislation, international protocols, regulation or other
restrictions on emissions could increase the costs of projects for our clients or, in some cases, prevent a
project from going forward, thereby potentially reducing the need for our services. In addition, relaxation
or repeal of laws and regulations, or changes in governmental policies regarding environmental, defense,
infrastructure or other industries we serve could result in a decline in demand for our services, which could
in turn negatively impact our revenues. We cannot predict when or whether any of these various proposals
may be enacted or what their effect will be on us or on our customers.

Changes in resource management, environmental, or infrastructure industry laws, regulations, and

programs could directly or indirectly reduce the demand for our services, which could in turn negatively
impact our revenue.

Some of our services are directly or indirectly impacted by changes in U.S. federal, state, local or
foreign laws and regulations pertaining to the resource management, environmental, and infrastructure
industries. Accordingly, a relaxation or repeal of these laws and regulations, or changes in governmental
policies regarding the funding, implementation or enforcement of these programs, could result in a decline
in demand for our services, which could in turn negatively impact our revenue.

Changes in capital markets could adversely affect our access to capital and negatively impact our business.

Our results could be adversely affected by an inability to access the revolving credit facility under
our credit agreement. Unfavorable financial or economic conditions could impact certain lenders

37
willingness or ability to fund our revolving credit facility. In addition, increases in interest rates or credit
spreads, volatility in financial markets or the interest rate environment, significant political or economic
events, defaults of significant issuers, and other market and economic factors, may negatively impact the
general level of debt issuance, the debt issuance plans of certain categories of borrowers, the types of
credit-sensitive products being offered, and/or a sustained period of market decline or weakness could
have a material adverse effect on us.

Restrictive covenants in our credit agreement may restrict our ability to pursue certain business strategies.

Our credit agreement limits or restricts our ability to, among other things:

incur additional indebtedness;

create liens securing debt or other encumbrances on our assets;

make loans or advances;

pay dividends or make distributions to our stockholders;

purchase or redeem our stock;

repay indebtedness that is junior to indebtedness under our credit agreement;

acquire the assets of, or merge or consolidate with, other companies; and

sell, lease, or otherwise dispose of assets.

Our credit agreement also requires that we maintain certain financial ratios, which we may not be
able to achieve. The covenants may impair our ability to finance future operations or capital needs or to
engage in other favorable business activities.

Our industry is highly competitive and we may be unable to compete effectively, which could result in
reduced revenue, profitability and market share.

We are engaged in a highly competitive business. The markets we serve are highly fragmented and
we compete with a large number of regional, national and international companies. Certain of these
competitors have greater financial and other resources than we do. Others are smaller and more
specialized, and concentrate their resources in particular areas of expertise. The extent of our competition
varies according to the particular markets and geographic area. In addition, the technical and professional
aspects of some of our services generally do not require large upfront capital expenditures and provide
limited barriers against new competitors. The degree and type of competition we face is also influenced by
the type and scope of a particular project. Our clients make competitive determinations based upon
qualifications, experience, performance, reputation, technology, customer relationships and ability to
provide the relevant services in a timely, safe and cost-efficient manner. This competitive environment
could force us to make price concessions or otherwise reduce prices for our services. If we are unable to
maintain our competitiveness and win bids for future projects, our market share, revenue, and profits will
decline.

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Legal proceedings, investigations, and disputes could result in substantial monetary penalties and
damages, especially if such penalties and damages exceed or are excluded from existing insurance coverage.

We engage in consulting, engineering, program management, construction management,

construction, and technical services that can result in substantial injury or damages that may expose us to
legal proceedings, investigations, and disputes. For example, in the ordinary course of our business, we may
be involved in legal disputes regarding personal injury claims, employee or labor disputes, professional
liability claims, and general commercial disputes involving project cost overruns and liquidated damages,
as well as other claims. In addition, in the ordinary course of our business, we frequently make professional
judgments and recommendations about environmental and engineering conditions of project sites for our
clients, and we may be deemed to be responsible for these judgments and recommendations if they are
later determined to be inaccurate. Any unfavorable legal ruling against us could result in substantial
monetary damages or even criminal violations. We maintain insurance coverage as part of our overall legal
and risk management strategy to minimize our potential liabilities; however, insurance coverage contains
exclusions and other limitations that may not cover our potential liabilities. Generally, our insurance
program covers workers compensation and employers liability, general liability, automobile liability,
professional errors and omissions liability, property, and contractors pollution liability (in addition to
other policies for specific projects). Our insurance program includes deductibles or self-insured retentions
for each covered claim that may increase over time. In addition, our insurance policies contain exclusions
that insurance providers may use to deny or restrict coverage. Excess liability and professional liability
insurance policies provide for coverage on a claims-made basis, covering only claims actually made and
reported during the policy period currently in effect. If we sustain liabilities that exceed or that are
excluded from our insurance coverage, or for which we are not insured, it could have a material adverse
impact on our results of operations and financial condition.

Unavailability or cancellation of third-party insurance coverage would increase our overall risk exposure as
well as disrupt the management of our business operations.

We maintain insurance coverage from third-party insurers as part of our overall risk management
strategy and because some of our contracts require us to maintain specific insurance coverage limits. If any
of our third-party insurers fail, suddenly cancel our coverage, or otherwise are unable to provide us with
adequate insurance coverage, then our overall risk exposure and our operational expenses would increase
and the management of our business operations would be disrupted. In addition, there can be no assurance
that any of our existing insurance coverage will be renewable upon the expiration of the coverage period or
that future coverage will be affordable at the required limits.

Our inability to obtain adequate bonding could have a material adverse effect on our future revenue and
business prospects.

Certain clients require bid bonds, and performance and payment bonds. These bonds indemnify
the client should we fail to perform our obligations under a contract. If a bond is required for a particular
project and we are unable to obtain an appropriate bond, we cannot pursue that project. In some instances,
we are required to co-venture with a small or disadvantaged business to pursue certain U.S. federal or state
government contracts. In connection with these ventures, we are sometimes required to utilize our bonding
capacity to cover all of the payment and performance obligations under the contract with the client. We
have a bonding facility but, as is typically the case, the issuance of bonds under that facility is at the suretys
sole discretion. Moreover, due to events that can negatively affect the insurance and bonding markets,
bonding may be more difficult to obtain or may only be available at significant additional cost. There can
be no assurance that bonds will continue to be available to us on reasonable terms. Our inability to obtain
adequate bonding and, as a result, to bid on new work could have a material adverse effect on our future
revenue and business prospects.

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Employee, agent, or partner misconduct, or our failure to comply with anti-bribery and other laws or
regulations, could harm our reputation, reduce our revenue and profits, and subject us to criminal and civil
enforcement actions.

Misconduct, fraud, non-compliance with applicable laws and regulations, or other improper
activities by one of our employees, agents, or partners could have a significant negative impact on our
business and reputation. Such misconduct could include the failure to comply with government
procurement regulations, regulations regarding the protection of classified information, regulations
prohibiting bribery and other foreign corrupt practices, regulations regarding the pricing of labor and other
costs in government contracts, regulations on lobbying or similar activities, regulations pertaining to the
internal controls over financial reporting, environmental laws, and any other applicable laws or regulations.
For example, as previously noted, the FCPA and similar anti-bribery laws in other jurisdictions generally
prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the
purpose of obtaining or retaining business. Our policies mandate compliance with these regulations and
laws, and we take precautions to prevent and detect misconduct. However, since our internal controls are
subject to inherent limitations, including human error, it is possible that these controls could be
intentionally circumvented or become inadequate because of changed conditions. As a result, we cannot
assure that our controls will protect us from reckless or criminal acts committed by our employees or
agents. Our failure to comply with applicable laws or regulations, or acts of misconduct could subject us to
fines and penalties, loss of security clearances, and suspension or debarment from contracting, any or all of
which could harm our reputation, reduce our revenue and profits, and subject us to criminal and civil
enforcement actions.

Our business activities may require our employees to travel to and work in countries where there are high
security risks, which may result in employee death or injury, repatriation costs or other unforeseen costs.

Certain of our contracts may require our employees travel to and work in high-risk countries that
are undergoing political, social, and economic upheavals resulting from war, civil unrest, criminal activity,
acts of terrorism, or public health crises. For example, we currently have employees working in high
security risk countries such as Afghanistan and Iraq. As a result, we risk loss of or injury to our employees
and may be subject to costs related to employee death or injury, repatriation, or other unforeseen
circumstances. We may choose or be forced to leave a country with little or no warning due to physical
security risks.

Our failure to implement and comply with our safety program could adversely affect our operating results
or financial condition.

Our project sites often put our employees and others in close proximity with mechanized
equipment, moving vehicles, chemical and manufacturing processes, and highly regulated materials. On
some project sites, we may be responsible for safety, and, accordingly, we have an obligation to implement
effective safety procedures. Our safety program is a fundamental element of our overall approach to risk
management, and the implementation of the safety program is a significant issue in our dealings with our
clients. We maintain an enterprise-wide group of health and safety professionals to help ensure that the
services we provide are delivered safely and in accordance with standard work processes. Unsafe job sites
and office environments have the potential to increase employee turnover, increase the cost of a project to
our clients, expose us to types and levels of risk that are fundamentally unacceptable, and raise our
operating costs. The implementation of our safety processes and procedures are monitored by various
agencies, including the U.S. Mine Safety and Health Administration, and rating bureaus, and may be
evaluated by certain clients in cases in which safety requirements have been established in our contracts.
Our failure to meet these requirements or our failure to properly implement and comply with our safety
program could result in reduced profitability, the loss of projects or clients, or potential litigation, and
could have a material adverse effect on our business, operating results, or financial condition.

40
We may be precluded from providing certain services due to conflict of interest issues.

Many of our clients are concerned about potential or actual conflicts of interest in retaining
management consultants. U.S. federal government agencies have formal policies against continuing or
awarding contracts that would create actual or potential conflicts of interest with other activities of a
contractor. These policies, among other things, may prevent us from bidding for or performing government
contracts resulting from or relating to certain work we have performed. In addition, services performed for
a commercial or government client may create a conflict of interest that precludes or limits our ability to
obtain work from other public or private organizations. We have, on occasion, declined to bid on projects
due to conflict of interest issues.

If our reports and opinions are not in compliance with professional standards and other regulations, we
could be subject to monetary damages and penalties.

We issue reports and opinions to clients based on our professional engineering expertise, as well as
our other professional credentials. Our reports and opinions may need to comply with professional
standards, licensing requirements, securities regulations, and other laws and rules governing the
performance of professional services in the jurisdiction in which the services are performed. In addition,
we could be liable to third parties who use or rely upon our reports or opinions even if we are not
contractually bound to those third parties. For example, if we deliver an inaccurate report or one that is not
in compliance with the relevant standards, and that report is made available to a third party, we could be
subject to third-party liability, resulting in monetary damages and penalties.

We may be subject to liabilities under environmental laws and regulations.

Our services are subject to numerous U.S. and international environmental protection laws and
regulations that are complex and stringent. For example, we must comply with a number of U.S. federal
government laws that strictly regulate the handling, removal, treatment, transportation, and disposal of
toxic and hazardous substances. Under the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended (CERCLA), and comparable state laws, we may be required to
investigate and remediate regulated hazardous materials. CERCLA and comparable state laws typically
impose strict, joint and several liabilities without regard to whether a company knew of or caused the
release of hazardous substances. The liability for the entire cost of clean-up could be imposed upon any
responsible party. Other principal U.S. federal environmental, health, and safety laws affecting us include,
but are not limited to, the Resource Conversation and Recovery Act, National Environmental Policy Act,
the Clean Air Act, the Occupational Safety and Health Act, the Federal Mine Safety and Health Act of
1977 (the Mine Act), the Toxic Substances Control Act, and the Superfund Amendments and
Reauthorization Act. Our business operations may also be subject to similar state and international laws
relating to environmental protection. Further, past business practices at companies that we have acquired
may also expose us to future unknown environmental liabilities. Liabilities related to environmental
contamination or human exposure to hazardous substances, or a failure to comply with applicable
regulations, could result in substantial costs to us, including clean-up costs, fines, civil or criminal sanctions,
and third-party claims for property damage or personal injury or cessation of remediation activities. Our
continuing work in the areas governed by these laws and regulations exposes us to the risk of substantial
liability.

Force majeure events, including natural disasters and terrorist actions, could negatively impact the
economies in which we operate or disrupt our operations, which may affect our financial condition, results
of operations, or cash flows.

Force majeure or extraordinary events beyond the control of the contracting parties, such as
natural and man-made disasters, as well as terrorist actions, could negatively impact the economies in

41
which we operate by causing the closure of offices, interrupting projects, and forcing the relocation of
employees. We typically remain obligated to perform our services after a terrorist action or natural disaster
unless the contract contains a force majeure clause that relieves us of our contractual obligations in such
an extraordinary event. If we are not able to react quickly to force majeure, our operations may be affected
significantly, which would have a negative impact on our financial condition, results of operations, or cash
flows.

We have only a limited ability to protect our intellectual property rights, and our failure to protect our
intellectual property rights could adversely affect our competitive position.

Our success depends, in part, upon our ability to protect our proprietary information and other
intellectual property. We rely principally on trade secrets to protect much of our intellectual property
where we do not believe that patent or copyright protection is appropriate or obtainable. However, trade
secrets are difficult to protect. Although our employees are subject to confidentiality obligations, this
protection may be inadequate to deter or prevent misappropriation of our confidential information. In
addition, we may be unable to detect unauthorized use of our intellectual property or otherwise take
appropriate steps to enforce our rights. Failure to obtain or maintain trade secret protection could
adversely affect our competitive business position. In addition, if we are unable to prevent third parties
from infringing or misappropriating our trademarks or other proprietary information, our competitive
position could be adversely affected.

Systems and information technology interruption could adversely impact our ability to operate.

We rely heavily on computer, information, and communications technology and systems to

operate. From time to time, we experience system interruptions and delays. If we are unable to effectively
deploy software and hardware, upgrade our systems and network infrastructure, and take steps to improve
and protect our systems, systems operations could be interrupted or delayed.

Our computer and communications systems and operations could be damaged or interrupted by
natural disasters, telecommunications failures, acts of war or terrorism, and similar events or disruptions.
In addition, we face the threat of unauthorized system access, computer hackers, computer viruses,
malicious code, organized cyber-attacks, and other security breaches and system disruptions. We devote
significant resources to the security of our computer systems, but they may still be vulnerable to threats.
Anyone who circumvents security measures could misappropriate proprietary information or cause
interruptions or malfunctions in system operations. As a result, we may be required to expend significant
resources to protect against the threat of system disruptions and security breaches, or to alleviate problems
caused by disruptions and breaches.

Any of these or other events could cause system interruption, delays, and loss of critical data that
could delay or prevent operations, and could have a material adverse effect on our business, financial
condition, results of operations, and cash flows, and could negatively impact our clients.

Our stock price could become more volatile and stockholders investments could lose value.

In addition to the macroeconomic factors that have affected the prices of many securities
generally, all of the factors discussed in this section could affect our stock price. Our common stock has
previously experienced substantial price volatility. In addition, the stock market has experienced extreme
price and volume fluctuations that have affected the market price of many companies, and that have often
been unrelated to the operating performance of these companies. The overall market and the price of our

42
common stock may fluctuate greatly. The trading price of our common stock may be significantly affected
by various factors, including:

quarter-to-quarter variations in our financial results, including revenue, profits, days sales
outstanding, backlog, and other measures of financial performance or financial condition, which
may be affected by the following:

loss of key employees;

the number and significance of client contracts commenced and completed during a quarter;

creditworthiness and solvency of clients;

the ability of our clients to terminate contracts without penalties;

general economic or political conditions;

unanticipated changes in contract performance that may affect profitability, particularly with
contracts that are fixed-price or have funding limits;

contract negotiations on change orders, requests for equitable adjustment, and collections of
related billed and unbilled accounts receivable;

seasonality of the spending cycle of our public sector clients, notably the U.S. federal
government, the spending patterns of our commercial sector clients, and weather conditions;

budget constraints experienced by our U.S. federal, and state and local government clients;

integration of acquired companies;

changes in contingent consideration related to acquisition earn-outs;

divestiture or discontinuance of operating units;

employee hiring, utilization and turnover rates;

delays incurred in connection with a contract;

the size, scope and payment terms of contracts;

the timing of expenses incurred for corporate initiatives;

reductions in the prices of services offered by our competitors;

threatened or pending litigation;

legislative and regulatory enforcement policy changes that may affect demand for our services;

the impairment of goodwill or identifiable intangible assets;

the fluctuation of a foreign currency exchange rate;

43
 stock-based compensation expense;

actual events, circumstances, outcomes, and amounts differing from judgments, assumptions,
and estimates used in determining the value of certain assets (including the amounts of related
valuation allowances), liabilities, and other items reflected in our consolidated financial
statements;

success in executing our strategy and operating plans;

changes in tax laws or regulations or accounting rules;

results of income tax examinations;

the timing of announcements in the public markets regarding new services or potential
problems with the performance of services by us or our competitors, or any other material
announcements;

speculation in the media and analyst community, changes in recommendations or earnings

estimates by financial analysts, changes in investors or analysts valuation measures for our
stock, and market trends unrelated to our stock;

our announcements concerning the payment of dividends or the repurchase of our shares;

resolution of threatened or pending litigation;

changes in investors and analysts perceptions of our business or any of our competitors
businesses;

changes in environmental legislation;

broader market fluctuations; and

general economic or political conditions.

Volatility in the financial markets could cause a decline in our stock price, which could trigger an
impairment of the goodwill of individual reporting units that could be material to our consolidated
financial statements. A significant drop in the price of our stock could also expose us to the risk of
securities class action lawsuits, which could result in substantial costs and divert managements attention
and resources, which could adversely affect our business. Additionally, volatility or a lack of positive
performance in our stock price may adversely affect our ability to retain key employees, many of whom are
awarded equity securities, the value of which is dependent on the performance of our stock price.

Delaware law and our charter documents may impede or discourage a merger, takeover, or other business
combination even if the business combination would have been in the best interests of our stockholders.

We are a Delaware corporation and the anti-takeover provisions of Delaware law impose various
impediments to the ability of a third party to acquire control of us, even if a change in control would be
beneficial to our stockholders. In addition, our Board of Directors has the power, without stockholder
approval, to designate the terms of one or more series of preferred stock and issue shares of preferred
stock, which could be used defensively if a takeover is threatened. Our incorporation under Delaware law,
the ability of our Board of Directors to create and issue a new series of preferred stock, and provisions in
our certificate of incorporation and bylaws, such as those relating to advance notice of certain stockholder

44
proposals and nominations, could impede a merger, takeover, or other business combination involving us,
or discourage a potential acquirer from making a tender offer for our common stock, even if the business
combination would have been in the best interests of our current stockholders.

Item 1B Unresolved Staff Comments

None.

Item 2. Properties

At fiscal 2016 year-end, we owned three facilities located in the United States and leased
approximately 350 operating facilities in domestic and foreign locations. Our significant lease agreements
expire at various dates through 2025. We believe that our current facilities are adequate for the operation
of our business, and that suitable additional space in various local markets is available to accommodate any
needs that may arise.

The following table summarizes our ten most significant leased properties by location based on
annual rental expenses (listed alphabetically):

Location Description Reportable Segment

Pasadena, CA Corporate Headquarters Corporate
Adelaide, South Australia, Australia Office Building RME
Arlington, VA Office Building WEI
Bellevue, WA Office Building WEI
Fairfax, VA Office Building WEI
London, United Kingdom Office Building RME
New York, NY Office Building WEI / RME
Perth, Western Australia, Australia Office Building RME
Pittsburgh, PA Office Building WEI / RME
Sydney, New South Wales, Australia Office Building RME

Item 3. Legal Proceedings

For a description of our material pending legal and regulatory proceedings and settlements, see
Note 18, Commitments and Contingencies of the Notes to Consolidated Financial Statements
included in Item 8.

Item 4. Mine Safety Disclosures

Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the
Dodd-Frank Act) requires domestic mine operators to disclose violations and orders issued under the
Mine Act by the U.S. Mine Safety and Health Administration. We do not act as the owner of any mines,
but we may act as a mining operator as defined under the Mine Act where we may be an independent
contractor performing services or construction at such mine. Information concerning mine safety violations
or other regulatory matters required by Section 1503(a) of the Dodd-Frank Act and Item 104 of
Regulation S-K is included in Exhibit 95.

45
PART II

Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities

Market Information

Our common stock is traded on the NASDAQ Global Select Market under the symbol TTEK.
There were 1,484 stockholders of record at November 7, 2016. The high and low sales prices per share for
the common stock for the last two fiscal years, as reported by the NASDAQ Global Select Market, are set
forth in the following tables.

Prices
High Low
Fiscal 2016
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $28.20 $23.80
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.60 22.85
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.74 28.01
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.24 29.13
Fiscal 2015
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $27.84 $23.68
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.25 22.98
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.48 23.87
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.52 24.12

Dividends

During fiscal 2016, we declared and paid dividends totaling $0.34 per share ($0.08 for the first and
second quarters and $0.09 for the third and fourth quarters) of our common stock. In fiscal 2015, we paid
dividends totaling $0.30 per share ($0.07 for the first and second quarters, and $0.08 for the third and
fourth quarters) of our common stock. We currently intend to continue paying dividends on a quarterly
basis, although the declaration of any future dividends will be determined by our Board of Directors and
will depend on available cash, estimated cash needs, earnings, and capital requirements, as well as
limitations in our long-term debt agreements.

Subsequent Event. On November 7, 2016, the Board of Directors declared a quarterly cash
dividend of $0.09 per share payable on December 14, 2016 to stockholders of record as of the close of
business on December 1, 2016.

Stock-Based Compensation

For information regarding our stock-based compensation, see Note 11, Stockholders Equity and
Stock Compensation Plans of the Notes to Consolidated Financial Statements included in Item 8.

Performance Graph

The following graph shows a comparison of our cumulative total returns with those of the
NASDAQ Market Index and the S&P 1500 Construction and Engineering Index. The graph assumes that
the value of an investment in our common stock and in each such index was $100 on October 2, 2011, and
that all dividends have been reinvested. During fiscal 2016, we declared and paid dividends in the first and
second quarters totaling $0.16 per share ($0.08 each quarter) on our common stock and paid dividends in

46
the third and fourth quarters totaling $0.18 per share ($0.09 each quarter) on our common stock. We
declared and paid dividends totaling $0.30 and $0.14 per share in fiscal 2015 and 2014, respectively. We did
not pay any dividends prior to fiscal 2014. Our self-selected Peer Group Index is the S&P 1500
Construction and Engineering Index. The comparison in the graph below is based on historical data and is
not intended to forecast the possible future performance of our common stock.
Tetra Tech, Inc. NASDAQ Market Index S&P 1500 Construction & Engineering Index

$280

$240

$200

$160

$120

$80

$40

$0
2011 2012 2013 2014 2015 15NOV201602023421
2016

ASSUMES $100 INVESTED ON OCTOBER 02, 2011

ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDED OCTOBER 02, 2016

2011 2012 2013 2014 2015 2016

Tetra Tech, Inc. 100.00 140.13 138.63 135.21 135.24 194.76
NASDAQ Market Index 100.00 130.53 160.67 194.05 203.86 234.02
S&P 1500 C&E Index 100.00 130.08 168.32 165.49 133.72 161.18

The performance graph above and related text are being furnished solely to accompany this
annual report on Form 10-K pursuant to Item 201(e) of Regulation S-K, and are not being filed for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated
by reference into any of our filings with the SEC, whether made before or after the date hereof, regardless
of any general incorporation language in such filing.

Stock Repurchase Program

In June 2013, our Board of Directors authorized a stock repurchase program under which we
could repurchase up to $100 million of our common stock. In February 2014, the Board amended this
repurchase program to authorize the repurchase of up to $30 million in open market purchases through
September 2014, revised the pricing parameters and extended the program through fiscal 2014. Stock
repurchases could be made on the open market or in privately negotiated transactions with third parties.
From the inception of this repurchase program through September 28, 2014, we repurchased through open
market purchases a total of 3.9 million shares at an average price of $25.59 per share, for a total cost of
$100 million. On November 10, 2014, the Board authorized a new stock repurchase program under which
we could repurchase up to $200 million of our common stock over the next two years. As of October 2,
2016, we repurchased through open market purchases a total of 7.4 million shares at an average price of
$26.91, for a total cost of $200 million under this repurchase program. These shares were repurchased

47
during the period from November 24, 2014 through October 2, 2016. A summary of the repurchase activity
for the 3 months ended October 2, 2016 is as follows:

Total Number Maximum

of Shares Dollar Value
Purchased as that May Yet
Part of Publicly be Purchased
Total Number Announced Under the
of Shares Average Price Plans or Plans or
Period Purchased Paid per Share Programs Programs

June 27, 2016 July 24, 2016 . . . . . . . . . . . 196,503 30.86 196,503 18,436,974
July 25, 2016 August 28, 2016 . . . . . . . . . 282,930 33.48 282,930 8,964,214
August 29, 2016 October 2, 2016 . . . . . . . 253,045 35.43 253,045

Subsequent Event. On November 7, 2016, our Board of Directors authorized a new stock
repurchase program under which we could repurchase up to $200 million of our common stock.

Item 6. Selected Financial Data

The following selected financial data was derived from our audited consolidated financial
statements. The selected financial data presented below should be read in conjunction with the
information contained in Item 7, Managements Discussion and Analysis of Financial Condition and
Results of Operations, and our consolidated financial statements and the notes thereto contained in
Item 8, Financial Statements and Supplementary Data, of this report.

Fiscal Year Ended

October 2, September 27, September 28, September 29, September 30,
2016 2015 2014 2013 2012
Statements of Operations Data (in thousands, except per share data)

Revenue . . . . . . . . . . . . . . . . ... $2,583,469 $2,299,321 $2,483,814 $2,613,755 $2,711,075

Operating income . . . . . . . . . . ... 135,855 87,684 153,833 20,218 166,367
Net income (loss) attributable to
Tetra Tech . . . . . . . . . . . . . . ... 83,783 39,074 108,266 (2,141) 104,380
Diluted net income (loss)
attributable to Tetra Tech per
share . . . . . . . . . . . . . . . . . ... 1.42 0.64 1.66 (0.03) 1.63
Cash dividends paid per share . . ... 0.34 0.30 0.14

Balance Sheet Data

Total assets . . . . . . . . . . . . . . . . . . $1,800,779 $1,559,242 $1,776,404 $1,799,092 $1,671,030

Long-term debt, net of current
portion . . . . . . . . . . . . . . . . . . . 331,501 180,972 192,842 203,438 81,047
Tetra Tech stockholders equity . . . . 869,259 856,325 1,012,079 997,763 1,018,970

Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations

The following analysis of our financial condition and results of operations should be read in
conjunction with Part I of this report, as well as our consolidated financial statements and accompanying
notes in Item 8. The following analysis contains forward-looking statements about our future results of
operations and expectations. Our actual results and the timing of events could differ materially from those
described herein. See Part 1, Item 1A, Risk Factors for a discussion of the risks, assumptions, and
uncertainties affecting these statements.

48
OVERVIEW OF RESULTS AND BUSINESS TRENDS

General. On an overall basis, our fiscal 2016 operating results reflected a significant
improvement compared to fiscal 2015. Our revenue growth resulted from broad-based contract wins across
our end markets, and was led by growth in U.S. federal government, U.S. state and local government, and
U.S. commercial activities in waste management and environmental remediation. In fiscal 2016, we
completed acquisitions that had a material impact on our financial results. On January 18, 2016, we
acquired Coffey, headquartered in Sydney, Australia. Coffey had approximately 3,300 staff delivering
technical and engineering solutions in international development and geoscience. Coffey significantly
expands our geographic presence, particularly in Australia and Asia Pacific, and is part of our RME
segment. In addition to Australia, Coffeys international development business has operations supporting
federal government agencies in the U.S. and the United Kingdom. In the second quarter of fiscal 2016, we
also acquired INDUS, headquartered in Vienna, Virginia. INDUS is a technology solutions firm focused
on water data analytics, geospatial analysis, secure infrastructure, and software applications management
for U.S. federal government customers, and is included in our WEI segment. We report results of
operations based on 52 or 53-week periods ending on the Sunday nearest September 30. Fiscal years 2016,
2015 and 2014 contained 53, 52 and 52 weeks, respectively.

In fiscal 2016, our revenue increased 12.4% compared to fiscal 2015. The fiscal 2016 acquisitions
contributed revenue of $320.6 million in fiscal 2016 since their respective acquisition dates. Excluding these
contributions, our revenue decreased 1.6% in fiscal 2016 compared to last year. This decline primarily
resulted from adverse foreign exchange rate fluctuations as the U.S. dollar was stronger on average in
fiscal 2016 versus fiscal 2015 against most of the foreign currencies in which we conduct our international
business, particularly the Canadian dollar. In addition, the revenue decline reflects a reduction in
construction activities compared to last year, which resulted from our decision in fiscal 2014 to exit from
select fixed-price construction markets in which RCM operated. On a constant currency basis, revenue
from our ongoing business in fiscal 2016, excluding RCM and the fiscal 2016 acquisitions, increased 1.8%
compared to fiscal 2015.

International. Our international business increased 28.3% in fiscal 2016 compared to the same
period last year. This growth was primarily due to Coffey, which contributed international revenue of
$211.6 million in fiscal 2016 from the acquisition date. Excluding this contribution but including the
adverse impact of foreign exchange rate fluctuations, our international business decreased 9.2% in fiscal
2016 compared to last year. Excluding the impact of foreign exchange, our ongoing international business
declined 2.1% compared to fiscal 2015, which reflects the commodity-driven slow-down in economic
activity in Canada. We anticipate increased international revenue in fiscal 2017. However, if commodity
prices remain low or decrease further, our international business could be negatively impacted.

U.S. Commercial. Our U.S. commercial business increased 3.7% in fiscal 2016 compared to fiscal
2015. This growth primarily reflects increased waste management and environmental remediation activities
that were partially offset by reduced work for oil and gas clients. We expect our U.S. commercial revenue
to be stable in fiscal 2017.

U.S. Federal Government. Our U.S. federal government business increased 10.5% in fiscal 2016
compared to fiscal 2015. Excluding the contributions from the fiscal 2016 acquisitions, our U.S. federal
government business decreased 4.7% in fiscal 2016 compared to last year, partially due to the reduction in
fixed-price construction activities in the RCM segment. Excluding these activities and the contributions
from the fiscal 2016 acquisitions, our U.S. federal government revenue was flat in fiscal 2016 compared to
last year. We experienced increased activity on civilian federal projects, which offset reduced activity on
DoD projects. During periods of economic volatility, our U.S. federal government clients have historically
been the most stable and predictable. We anticipate growth in U.S. federal revenue in fiscal 2017.

49
 U.S. State and Local Government. Our U.S. state and local government business increased 7.9%
in fiscal 2016 compared to fiscal 2015. We experienced this increase despite the impact of the
aforementioned reduction in certain construction activities, especially those related to state transportation
projects in the RCM segment. Excluding these activities, our U.S. state and local government revenue
increased 10.8% in fiscal 2016 compared to last year. Many state and local government agencies are
experiencing improved financial conditions that enable them to address major long-term infrastructure
requirements, including the need for maintenance, repair, and upgrading of existing critical infrastructure
and the need to build new facilities. As a result, we experienced broad-based growth in our U.S. state and
local government project-related infrastructure revenue. We expect our U.S. state and local government
business to show growth during fiscal 2017.

RESULTS OF OPERATIONS

Fiscal 2016 Compared to Fiscal 2015

Consolidated Results of Operations

Fiscal Year Ended

October 2, September 27, Change

2016 2015 $ %
($ in thousands)

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,583,469 $ 2,299,321 $ 284,148 12.4%

Subcontractor costs . . . . . . . . . . . . . . . . . . . . . . . (654,264) (580,606) (73,658) (12.7)
Revenue, net of subcontractor costs (1) . . . . . . . . 1,929,205 1,718,715 210,490 12.2
Other costs of revenue . . . . . . . . . . . . . . . . . . . . (1,598,994) (1,402,925) (196,069) (14.0)
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . 330,211 315,790 14,421 4.6
Selling, general and administrative expenses . . . . . . (171,985) (170,456) (1,529) (0.9)
Acquisition and integration expenses . . . . . . . . . . . (19,548) (19,548) NM
Contingent consideration fair value adjustments . . (2,823) 3,113 (5,936) (190.7)
Impairment of goodwill and other intangible assets . (60,763) 60,763 100.0
Operating income . . . . . . . . . . . . . . . . . . . . . . 135,855 87,684 48,171 54.9
Interest expense net . . . . . . . . . . . . . . . . . . . . . (11,389) (7,363) (4,026) (54.7)
Income before income tax expense . . . . . . . . . . . 124,466 80,321 44,145 55.0
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . (40,613) (41,093) 480 1.2
Net income including noncontrolling interests . . . 83,853 39,228 44,625 113.8
Net income attributable to noncontrolling
interests . . . . . . . . . . . . . . . . . . . . . . . . . . . (70) (154) 84 54.5
Net income attributable to Tetra Tech . . . . . . . . . 83,783 39,074 44,709 114.4
Diluted earnings per share . . . . . . . . . . . . . . . . . . $ 1.42 $ 0.64 $ 0.78 121.9

(1)
We believe that the presentation of Revenue, net of subcontractor costs, which is a non-GAAP financial
measure, enhances investors ability to analyze our business trends and performance because it substantially
measures the work performed by our employees. In the course of providing services, we routinely subcontract
various services and, under certain USAID programs, issue grants. Generally, these subcontractor costs and grants
are passed through to our clients and, in accordance with GAAP and industry practice, are included in our
revenue when it is our contractual responsibility to procure or manage these activities. Because subcontractor
services can vary significantly from project to project and period to period, changes in revenue may not necessarily
be indicative of our business trends. Accordingly, we segregate subcontractor costs from revenue to promote a

50
 better understanding of our business by evaluating revenue exclusive of costs associated with external service
providers.
NM = not meaningful

The following table reconciles our reported results to non-GAAP ongoing results, which exclude
the RCM results, certain purchase accounting-related adjustments, and the impact of changes in foreign
exchange translation rates in fiscal 2016 compared to fiscal 2015. Ongoing results also exclude Coffey-
related acquisition and integration expenses, and debt pre-payment fees in fiscal 2016. Additionally,
ongoing diluted earnings per share (EPS) for fiscal 2016 excludes the benefit of the retroactive extension
of the research and development (R&D) credits described below. The effective tax rate applied to the
adjustments to EPS to arrive at ongoing EPS averaged 25% and 8% in fiscal 2016 and fiscal 2015,
respectively. We apply the relevant marginal statutory tax rate based on the nature of the adjustments and
the tax jurisdiction in which they occur. These average rates are lower than our overall effective tax rates
due to certain acquisition and integration expenses incurred in fiscal 2016 and most of the impairment of
goodwill and other intangible assets in fiscal 2015, which had no tax benefit. Both EPS and ongoing EPS
were calculated using diluted weighted-average common shares outstanding for the respective periods as
reflected in our consolidated statements of income.

Fiscal Year Ended

October 2, September 27, Change

2016 2015 $ %
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,583,469 $ 2,299,321 $ 284,148 12.4%
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . 40,749 40,749
RCM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (52,150) (86,575) 34,425
Ongoing revenue . . . . . . . . . . . . . . . . . . . . . . . . $ 2,572,068 $ 2,212,746 $ 359,322 16.2
Revenue, net of subcontractor costs . . . . . . . . . . . . $ 1,929,205 $ 1,718,715 $ 210,490 12.2
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . 37,684 37,684
RCM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,267) (23,275) 6,008
Ongoing revenue, net of subcontractors costs . . . . . $ 1,949,622 $ 1,695,440 $ 254,182 15.0
Operating income . . . . . . . . . . . . . . . . . . . . . . . . $ 135,855 $ 87,684 $ 48,170 54.9
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . 1,944 1,944
Acquisition and integration expenses . . . . . . . . . 19,548 19,548
Contingent consideration fair value adjustments . 2,823 (3,113) 5,936
Impairment of goodwill and other intangible
assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,763 (60,763)
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,170 145,334 14,836 10.2
RCM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,834 8,614 3,220
Ongoing operating income . . . . . . . . . . . . . . . . . . $ 172,004 $ 153,948 $ 18,056 11.7%
EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.42 $ 0.64 $ 0.78 121.9
Contingent consideration fair value adjustments . 0.03 (0.04) 0.07
RCM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.14 0.10 0.04
Acquisition and integration expenses . . . . . . . . . 0.29 0.29
Coffey debt prepayment . . . . . . . . . . . . . . . . . . 0.03 0.03
Impairment of goodwill and other intangible
assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.93 (0.93)
Retroactive R&D tax . . . . . . . . . . . . . . . . . . . . (0.03) (0.02) (0.01)
Ongoing EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.88 $ 1.61 $ 0.27 16.8
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . 0.03 0.03
Ongoing EPS, net of foreign exchange . . . . . . . . . . $ 1.91 $ 1.61 $ 0.30 18.6

51
 In fiscal 2016, revenue and revenue, net of subcontractor costs, increased $284.1 million, or 12.4%,
and $210.5 million, or 12.2%, respectively, compared to fiscal 2015. These results include the above-
described fluctuation in foreign exchange rates and the reduction in certain construction activities
compared to last year. Revenue declines caused by foreign exchange rate fluctuations resulted from a
stronger U.S. dollar versus most of the foreign currencies in which we conduct our international business,
particularly the Canadian dollar. These fluctuations negatively impacted revenue and revenue, net of
subcontractor costs, by $40.7 million and $37.7 million, respectively, in fiscal 2016 compared to last year.
Revenue and revenue, net of subcontractor costs, from the exited construction activities, which are
reported in the RCM segment, declined $34.4 million and $6.0 million, respectively, in fiscal 2016
compared to fiscal 2015.

Our ongoing revenue and revenue, net of subcontractor costs, increased 16.2% and 15.0%,
respectively, in fiscal 2016 compared to fiscal 2015. These increases reflect combined revenue and revenue,
net of subcontractor costs, of $320.6 million and $233.1 million, respectively, in fiscal 2016 from the fiscal
2016 acquisitions since their respective acquisition dates in the second quarter of fiscal 2016. Excluding
these contributions, our ongoing revenue and revenue, net of subcontractor costs, increased 1.8% and
1.2%, respectively, in fiscal 2016 compared to last year. These results reflect increased commercial and
state and local government activity in our ongoing U.S. operations. On a combined basis, commercial and
state and local government revenue and revenue, net of subcontractor costs in our ongoing U.S. operations
increased $52.5 million and $34.1 million, respectively, in fiscal 2016 compared to fiscal 2015, primarily due
to increased waste management, environmental remediation, and infrastructure activities. However, these
increases were offset by a decline in our international activities that was caused primarily by the
commodity-driven slowdown in economic activity in Canada.

Our operating income increased $48.2 million in fiscal 2016 compared to fiscal 2015. Our
operating income in 2016 was reduced by Coffey-related acquisition and integration expenses of
$19.5 million. For further detailed information regarding these expenses, see Fiscal 2016 Acquisition and
Integration Expenses below. In addition, losses of $2.8 million resulting from changes in the estimated
fair value of contingent earn-out liabilities reduced our operating income in fiscal 2016. These earn-out
losses compare to a gain of $3.1 million in fiscal 2015 and are described below under Fiscal 2016 and 2015
Earn-Out Adjustments. Further, we recognized a non-cash goodwill and other intangible asset
impairment charge of $60.8 million in fiscal 2015 related to our GMP reporting unit, which is described
below under Fiscal 2015 Impairment of Goodwill and Other Intangible Assets. The aforementioned
year-over-year foreign exchange rate fluctuations reduced operating income by $1.9 million in fiscal 2016
compared to fiscal 2015. The loss from exited construction activities in our RCM segment was $11.8 million
in fiscal 2016 compared to $8.6 million last year. Our RCM results are described below under
Remediation and Construction Management. Excluding these non-operating items, ongoing operating
income increased $18.1 million, or 11.7%, in fiscal 2016 compared to fiscal 2015.

The increase in our ongoing operating income in fiscal 2016 primarily reflects improved results in
our RME segment compared to last year. On a constant currency basis, RMEs ongoing operating income
increased $21.1 million in fiscal 2016 compared to last year. This increase includes operating income of
$12.5 million from Coffey since the acquisition date. Our RME results are described below under
Resource Management and Energy. The higher operating income in the RME segment was partially
offset by intangible amortization, which increased by $1.9 million in fiscal 2016 compared to last year.

Interest expense, net was $11.4 million in fiscal 2016, compared to $7.4 million in the same period
last year. Interest expense in fiscal 2016 includes Coffey-related debt pre-payment fees of $1.9 million that
were incurred in the second quarter. The remaining increase in interest expense reflects additional
borrowings to fund the Coffey acquisition.

52
 Our effective tax rates for fiscal 2016 and 2015 were 32.6% and 51.2%, respectively. In fiscal 2016,
we incurred $13.3 million of acquisition and integration expenses and debt pre-payment fees for which no
tax benefit was recognized. Of this amount, $6.4 million resulted from acquisition expenses that were not
tax deductible, and $6.9 million resulted from integration expenses and debt pre-payment fees incurred in
jurisdictions with current and historical net operating losses where the related deferred tax asset was fully
reserved. Additionally, during the first quarter of fiscal 2016, the Protecting Americans from Tax Hikes Act
of 2015 was signed into law which permanently extended the federal R&D credits retroactive to January 1,
2015. Our income tax expense for fiscal 2016 included a tax benefit of $2.0 million attributable to operating
income during the last nine months of fiscal 2015, primarily related to the retroactive recognition of the
R&D credits. Our income tax expense for fiscal 2015 included a similar retroactive tax benefit of
$1.2 million attributable to operating income during the last nine months of fiscal 2014. Our effective tax
rate in fiscal 2015 also reflected the impact of the $60.8 million goodwill and intangible asset impairment
charge, of which most was not tax deductible. Excluding these items, our effective tax rates for fiscal 2016
and 2015 were 30.9% and 32.5%, respectively. The lower tax rate this year primarily reflects a
measurement change in tax positions taken in prior years relating in large part to developments in our
ongoing IRS examination that reduced our effective tax rate by 2.0% in fiscal 2016.

EPS was $1.42 in fiscal 2016, compared to $0.64 in fiscal 2015. This comparison reflects the
acquisition and integration expenses and debt pre-payment fees of $21.5 million ($19.0 million after tax) in
fiscal 2016. These charges reduced EPS by $0.32 per share in fiscal 2016. Additionally, EPS in fiscal 2015
was lower due to the $60.8 million ($57.3 million after-tax) non-cash impairment charge for goodwill and
other intangible assets, which reduced EPS by $0.93. The other non-operating items described above
(foreign exchange, earn-out gains/losses, and RCM segment results) also adversely affected the
year-over-year EPS comparisons. On the same basis as our ongoing operating income, EPS was $1.88 in
fiscal 2016 compared to $1.61 last year.

Fiscal 2016 Acquisition and Integration Expenses

In fiscal 2016, we incurred Coffey-related acquisition and integration expenses of $19.5 million.
The $7.9 million of acquisition expenses were primarily for professional services, such as legal and
investment banking, to support the transaction. Throughout the remainder of fiscal 2016 subsequent to the
acquisition date, we incurred costs of $11.6 million on integration activities, including the elimination of
redundant general and administrative costs, real estate consolidation, and conversion of information
technology platforms. As of October 2, 2016, these activities were substantially complete and all of the
related costs had been paid.

Fiscal 2016 and 2015 Earn-Out Adjustments

In both fiscal 2016 and 2015, our operating income included significant non-cash adjustments
related to our estimated contingent earn-out liabilities. We review and re-assess the estimated fair value of
contingent consideration on a quarterly basis, and the updated fair value could differ materially from the
initial estimates. During fiscal 2016, we increased our contingent earn-out liabilities and reported related
losses in operating income of $2.8 million. These losses include a $1.8 million charge that reflected our
updated valuation of the contingent consideration liability for CEG. This valuation included our updated
projection of CEGs financial performance during the earn-out period, which exceeded our original
estimate at the acquisition date. The remaining $1.0 million loss represented the final cash settlement of an
earn-out liability that was valued at $0 at the end of fiscal 2015.

During fiscal 2015, we recorded a decrease in our contingent earn-out liabilities and reported a
related gain in operating income of $3.1 million. This gain resulted from an updated valuation of the
contingent consideration liability for Caber Engineering Inc. (Caber). Our assessment of the Caber
liability included a review of the status of on-going projects in Cabers backlog and the inventory of

53
prospective new contract awards. We also considered the status of the upstream oil and gas industry in
Western Canada, particularly in light of the recent decline in oil prices. As a result of this assessment, we
concluded that Cabers operating income in the second year post-acquisition would be lower than our
original estimate at the acquisition date and our subsequent estimates through fiscal 2014. We also
concluded that Cabers operating income for the second earn-out period, which ended in the first quarter
of fiscal 2015, would be lower than the minimum requirement of C$4.6 million to earn any contingent
consideration. Accordingly, in fiscal 2015, we reduced the Caber contingent earn-out liability to $0, which
resulted in a gain of $3.1 million. When we determined that Cabers operating income would be lower than
our original estimate at the acquisition date, we also evaluated the related goodwill for potential
impairment. We determined that the lower income projections were the result of temporary events, and
did not negatively impact Cabers longer-term performance or result in a goodwill impairment.

Fiscal 2015 Impairment of Goodwill and Other Intangible Assets

In the fourth quarter of fiscal 2015, the mining sector continued to contract in response to lower
global growth expectations driven in large part by Chinas actual and projected slower economic growth.
Consistent with this trend, our mining customers continued their curtailment of capital spending for new
mining projects. As a result, our GMP reporting unit experienced a 25% decline in revenue in the fourth
quarter of fiscal 2015 compared to the same period of fiscal 2014. This negative trend was compared to the
expected revenue growth of approximately 3% in the previous goodwill impairment test, performed as of
June 30, 2014. Because of these results, we performed a strategic review of GMP in the fourth quarter of
fiscal 2015, and determined that our mining activities would likely decline further in fiscal 2016, and that
revenue and profits would not return to acceptable levels of performance in the foreseeable future. We
also decided to redeploy our mining resources into other operational areas that have better growth and
profitability prospects. Consequently, as of the first day of fiscal 2016, GMP was no longer a reporting unit.
We considered GMPs financial performance and prospects in our goodwill impairment analysis in the
fourth quarter of fiscal 2015 and determined that GMPs fair value had fallen significantly below its
carrying value, including goodwill. As required, we performed further analysis to measure the amount of
the impairment loss and, as a result, we wrote-off all of GMPs goodwill and identifiable intangible assets
and recorded a related impairment charge of $60.8 million ($57.3 million after-tax) in the fourth quarter of
fiscal 2015. The related goodwill and identifiable intangible assets that were determined not to be
recoverable totaled $58.1 million and $2.7 million, respectively. We had no goodwill impairment in fiscal
2016.

Segment Results of Operations

In fiscal 2016, we managed our continuing operations under two reportable segments. We report
our water resources, water and wastewater treatment, environment, and infrastructure engineering
activities in the WEI reportable segment. Our RME reportable segment includes our oil and gas, energy,
international development, waste management, remediation, and utilities services. In addition, we report
the results of the wind-down of our non-core construction activities in the RCM reportable segment.

54
Water, Environment and Infrastructure

Fiscal Year Ended

October 2, September 27, Change
2016 2015 $ %
($ in thousands)

Revenue . . . . . . . . . . . . . $ 1,028,281 $ 993,631 $ 36,650 3.5%

Subcontractor costs . . . . . . (274,826) (230,355) (44,471) 19.3
Revenue, net of
subcontractor costs . . . . . $ 753,455 $ 763,276 $ (9,821) (1.3)
Operating income . . . . . . . $ 95,996 $ 93,142 $ 2,854 3.1

Revenue increased 3.5% and revenue, net of subcontractor costs, decreased 1.3% in fiscal 2016
compared to fiscal 2015. On a constant currency basis, revenue and revenue, net of subcontractor costs,
increased 5.0% and 0.5%, respectively, in fiscal 2016 compared to last year. As described above, foreign
exchange rate fluctuations negatively impacted revenue and revenue, net of subcontractor costs, in the
amounts of $15.3 million and $14.0 million, respectively, for fiscal 2016 compared to last year. The
increases in revenue and revenue, net of subcontractor costs, resulted primarily from increased U.S.
federal activity and additional work on infrastructure projects for U.S. state and local government clients.

Operating income increased $2.9 million in fiscal 2016 compared to fiscal 2015. Operating margin,
based on revenue, net of subcontractor costs, improved to 12.7% in fiscal 2016 from 12.2% last year. This
improved profitability primarily reflects the full-year benefit in fiscal 2016 of measures taken throughout
last year to improve operational efficiency, primarily in our Canadian operations. These actions included
the right-sizing of general and administrative staff and real estate consolidations.

Resource Management and Energy

Fiscal Year Ended

October 2, September 27, Change
2016 2015 $ %
($ in thousands)

Revenue . . . . . . . . . . . . . $ 1,569,702 $ 1,282,046 $ 287,656 22.4%

Subcontractor costs . . . . . . (411,219) (349,882) (61,337) 17.5
Revenue, net of
subcontractor costs . . . . . $ 1,158,483 $ 932,164 $ 226,319 24.3
Operating income . . . . . . . $ 112,202 $ 93,359 $ 18,843 20.2

Revenue and revenue, net of subcontractor costs, increased 22.4% and 24.3%, respectively, in
fiscal 2016 compared to fiscal 2015. On a constant currency basis, revenue and revenue, net of
subcontractor costs, increased 24.5% and 26.8%, respectively, in fiscal 2016, compared to last year. As in
the WEI segment, foreign exchange rate fluctuations negatively impacted revenue and revenue, net of
subcontractor costs in the amounts of $26.4 million and $23.7 million, respectively, in fiscal 2016 compared
to last year. The increases are primarily due to Coffey contributions of $302.9 million of revenue and
$220.6 million of revenue, net of subcontractor costs in fiscal 2016 since the acquisition date. On a constant
currency basis, excluding the Coffey contribution, our revenue and revenue, net of subcontractor costs,

55
increased 0.9% and 3.2%, respectively, in fiscal 2016 compared to fiscal 2015. The increases primarily
reflect higher waste management and international development revenue.

Operating income increased $18.8 million ($21.1 million on a constant currency basis) in fiscal
2016 compared to fiscal 2015. Coffey contributed operating income of $12.5 million in fiscal 2016 since the
acquisition date. The $6.3 million increase in operating income, excluding Coffey, in fiscal 2016 reflects the
higher waste management and international development revenue.

Remediation and Construction Management

Fiscal Year Ended

October 2, September 27, Change
2016 2015 $ %
($ in thousands)

Revenue . . . . . . . . . . . . . $ 52,150 $ 86,575 $ (34,425) (39.8)%

Subcontractor costs . . . . . . (34,883) (63,300) 28,417 (44.9)
Revenue, net of
subcontractor costs . . . . . $ 17,267 $ 23,275 $ (6,008) (25.8)
Operating loss . . . . . . . . . . $ (11,834) $ (8,614) $ (3,220) (37.4)

Revenue and revenue, net of subcontractor costs, decreased $34.4 million and $6.0 million,
respectively, in fiscal 2016 compared to fiscal 2015. These decreases resulted from our decision to
wind-down the RCM construction activities. The operating loss in fiscal 2016 resulted from adverse
changes in the estimated costs to complete several of the remaining projects and legal expenses to resolve
various outstanding project claims. In addition, the fiscal 2016 operating loss of $11.8 million includes
$7.9 million of losses related to uncollectible accounts receivable, including claims. This loss was partially
offset by a gain of $4.6 million from the settlement of a claim with a U.S. federal government client for
work completed in fiscal 2013. The remaining RCM backlog at the end of fiscal 2016 was $26 million. The
related work to be performed in this segment will be substantially completed in 2017.

56
Fiscal 2015 Compared to Fiscal 2014

Consolidated Results of Operations

Fiscal Year Ended

September 27, September 28, Change
2015 2014 $ %
($ in thousands)

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,299,321 $ 2,483,814 $ (184,493) (7.4)%

Subcontractor costs . . . . . . . . . . . . . . . . . . . (580,606) (623,896) 43,290 6.9
Revenue, net of subcontractor costs(1) . . . . . 1,718,715 1,859,918 (141,203) (7.6)
Other costs of revenue . . . . . . . . . . . . . . . . (1,402,925) (1,577,481) 174,556 11.1
Selling, general and administrative expenses . . (170,456) (187,298) 16,842 9.0
Contingent consideration fair value
adjustments . . . . . . . . . . . . . . . . . . . . . . 3,113 58,694 (55,581) 94.7
Impairment of goodwill and other intangible
assets . . . . . . . . . . . . . . . . . . . . . . . . . . (60,763) (60,763) (100.0)
Operating income . . . . . . . . . . . . . . . . . . 87,684 153,833 (66,149) (43.0)
Interest expense net . . . . . . . . . . . . . . . . . (7,363) (9,490) 2,127 22.4
Income before income tax expense . . . . . . . 80,321 144,343 (64,022) (44.4)
Income tax expense . . . . . . . . . . . . . . . . . . (41,093) (35,668) (5,425) (15.2)
Net income including noncontrolling
interests . . . . . . . . . . . . . . . . . . . . . . . 39,228 108,675 (69,447) (63.9)
Net income attributable to noncontrolling
interests . . . . . . . . . . . . . . . . . . . . . . . (154) (409) 255 62.3
Net income attributable to Tetra Tech . . . . $ 39,074 $ 108,266 $ (69,192) (63.9)

(1)
We believe that the presentation of Revenue, net of subcontractor costs, which is a non-GAAP financial
measure, enhances investors ability to analyze our business trends and performance because it substantially
measures the work performed by our employees. In the course of providing services, we routinely subcontract
various services and, under certain USAID programs, issue grants. Generally, these subcontractor costs and grants
are passed through to our clients and, in accordance with GAAP and industry practice, are included in our
revenue when it is our contractual responsibility to procure or manage these activities. Because subcontractor
services can vary significantly from project to project and period to period, changes in revenue may not necessarily
be indicative of our business trends. Accordingly, we segregate subcontractor costs from revenue to promote a
better understanding of our business by evaluating revenue exclusive of costs associated with external service
providers.

In fiscal 2015, revenue and revenue, net of subcontractor costs, decreased $184.5 million, or 7.4%,
and $141.2 million, or 7.6%, respectively, compared to fiscal 2014. These declines reflect the above-
described reduction in construction activities and the fluctuation in foreign exchange rates. Revenue and
revenue, net of subcontractor costs, from these construction activities, which are reported in the RCM
segment, declined $134.5 million and $56.2 million, respectively, in fiscal 2015 compared to the previous
year. Revenue declines caused by foreign exchange rate fluctuations resulted from a stronger U.S. dollar
during fiscal 2015 versus most of the foreign currencies in which we conduct our international business,
particularly the Canadian dollar. These fluctuations negatively impacted revenue and revenue, net of
subcontractor costs, by $71.2 million and $64.4 million, respectively, in fiscal 2015 compared to fiscal 2014.

On a constant currency basis, our ongoing revenue and revenue, net of subcontractor costs,
excluding the exited activities in the RCM segment increased 0.9% and decreased 1.2%, respectively, in
fiscal 2015 compared to fiscal 2014. These results reflect increased state and local government and

57
commercial activity in our ongoing U.S. operations. On a combined basis, revenue and revenue, net of
subcontractor costs, from these activities increased $78.3 million, or 8.6%, and $29.4 million, or 4.1%,
respectively, in fiscal 2015 compared to the prior year, primarily due to increased environmental
remediation, infrastructure, and energy-related activities. These increases were offset by a decline in our
U.S. federal activity. Our ongoing U.S. federal revenue and revenue, net of subcontractor costs, decreased
$46.4 million and $43.8 million, respectively, in fiscal 2015 compared to fiscal 2014, which primarily
reflected less work for the DoD.

The following table reconciles our reported results to ongoing results, which exclude RCM results,
purchase accounting adjustments, and the impact of foreign exchange translation:

Fiscal Year Ended

September 27, September 28, Change
2015 2014 $ %
($ in thousands)

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,299,321 $ 2,483,814 $ (184,493) (7.4)%

Foreign exchange . . . . . . . . . . . . . . . . . . 71,227 71,227
RCM . . . . . . . . . . . . . . . . . . . . . . . . . . . (86,575) (221,109) 134,534
Ongoing revenue . . . . . . . . . . . . . . . . . . . . 2,283,973 2,262,705 21,268 0.9
Revenue, net of subcontractor cost . . . . . . . . 1,718,715 1,859,918 (141,203) (7.6)
Foreign exchange . . . . . . . . . . . . . . . . . . 64,421 64,421
RCM . . . . . . . . . . . . . . . . . . . . . . . . . . . (23,275) (79,498) 56,223
Ongoing revenue, net of subcontractor costs . . 1,759,861 1,780,420 (20,559) (1.2)
Operating income . . . . . . . . . . . . . . . . . . . . 87,684 153,833 (66,149) (43.0)
Foreign exchange . . . . . . . . . . . . . . . . . . 3,122 3,122
Contingent consideration fair value
adjustments . . . . . . . . . . . . . . . . . . . . . (3,113) (58,694) 55,581
Impairment of goodwill and other intangible
assets . . . . . . . . . . . . . . . . . . . . . . . . . 60,763 60,763
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . 148,456 95,139 53,317 56.0
RCM . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,614 45,151 (36,537)
Ongoing operating income . . . . . . . . . . . . . . $ 157,070 $ 140,290 $ 16,780 12.0

Our operating income decreased to $87.7 million in fiscal 2015 from $153.8 million in fiscal 2014.
We recognized a non-cash goodwill and other intangible asset charge of $60.8 million in the fourth quarter
of fiscal 2015 related to our GMP reporting unit. This item is described above under Fiscal 2015
Impairment of Goodwill and Other Intangible Assets. The operating income decline also reflects the
reduction in net gains related to changes in the estimated fair value of contingent earn-out liabilities. The
earn-out net gains in fiscal 2015 are discussed above under Fiscal 2016 and 2015 Earn-Out Adjustments.
The earn-out net gains in fiscal 2014 are discussed below under Fiscal 2014 Earn-Out Adjustments. In
addition, the loss from the exited construction activities in our RCM segment was $8.6 million in fiscal 2015
compared to $45.2 million the previous year. The fiscal 2014 RCM results included project-related charges
that are described below under Remediation and Construction Management. Additionally, the
aforementioned year-over-year foreign exchange rate fluctuations reduced operating income by
$3.1 million in fiscal 2015 compared to fiscal 2014. Excluding these non-operating items, ongoing operating
income increased $16.8 million, or 12.0%, compared to fiscal 2014.

The increase in ongoing operating income was primarily due to improved results in our RME
segment. On a constant currency basis, operating income in RME increased $10.9 million, or 12.9%, in
fiscal 2015 compared to fiscal 2015. This increase was primarily driven by improved results in our

58
midstream oil and gas operations, particularly in Western Canada. In addition, lower intangible asset
amortization of $5.6 million, on a constant currency basis, contributed to the higher year-over-year ongoing
operating income.

In fiscal 2015, we recorded income tax expense of $41.1 million, representing an effective tax rate
of 51.2%. This tax rate is higher than the expected statutory tax rate primarily due to the $60.8 million
goodwill and intangible assets impairment charge most of which was not tax deductible. In fiscal 2014, we
recorded income tax expense of $35.7 million, representing an effective tax rate of 24.7%, which was lower
than the expected rate due to the impact of gains from changes to contingent consideration liabilities, most
of which were not taxable. Excluding these items in both years, our effective tax rate was 32.3% in fiscal
2015 compared to 36.2% in fiscal 2014. During the first quarter of fiscal 2015, the Tax Increase Prevention
Act of 2014 was signed into law. This law retroactively extended the federal R&D credits for amounts
incurred from January 1, 2014 through December 31, 2014. Our income tax expense for fiscal 2015
includes a tax benefit of $1.2 million attributable to operating income during the last nine months of fiscal
2014, primarily related to the retroactive recognition of these credits. The remainder of the decline in the
effective tax rate was primarily due to a higher proportion of operating income from international
operations, in fiscal 2015 compared to fiscal 2014, which have lower tax rates than the U.S.

Fiscal 2014 Earn-Out Adjustments

In fiscal 2014, our operating income included net gains of $3.1 million related to net decreases in
our estimated contingent earn-out liabilities. The fiscal 2014 net gains primarily resulted from updated
valuations of the contingent consideration liabilities for Parkland Pipeline (Parkland), which is part of
our Oil, Gas and Energy reporting unit, and American Environmental Group (AEG), which is part of
our Waste Management Group reporting unit. Both of these reporting units are in the RME segment.

We review and re-assess the estimated fair value of contingent consideration on a quarterly basis,
and the updated fair value could differ materially from the initial estimates. In fiscal 2014, we recorded
decreases in our contingent earn-out liability for Parkland and reported related gains in operating income
of $44.6 million. These gains resulted from Parklands actual and projected post-acquisition performance
falling below our initial expectations concerning the likelihood and timing of achieving the relevant
operating income thresholds in each of the three years subsequent to the acquisition. In the second quarter
of fiscal 2014, we updated the estimated cost to complete a large fixed-price contract at Parkland and
determined that the project would be break-even compared to the significant profit estimated the previous
quarter when the project was initiated. As a result, during the second quarter of fiscal 2014 we reversed
$5.3 million of profit previously recognized on the project. This variance, and our updated estimate that
the revenue for the remainder of the project would produce no operating income, resulted in our
conclusion that Parklands operating income in the first and second earn-out periods would fall below the
minimum operating income thresholds in each such year. As a result, we reduced the contingent earn-out
liability for the first and second earn-out periods to $0, which resulted in gains totaling $24.7 million
($5.6 million and $19.1 million in the first and second quarters of fiscal 2014, respectively). The remaining
fiscal 2014 gain of $19.9 million was recognized in the fourth quarter of fiscal 2014, which reduced the
related liability to $0 at the end of fiscal 2014.

In fiscal 2014, we also recorded net decreases in our contingent earn-out liability for AEG and
reported related net gains in operating income of $12.4 million. AEGs first earn-out period ended on the
last day of the first quarter of fiscal 2014. As a result, during the first quarter of fiscal 2014, we performed a
preliminary calculation of the contingent consideration for the first earn-out period and concluded that
AEGs operating income in that period would be higher than both our original estimate at the acquisition
date and our previous quarterly estimates. As a result, we increased the contingent earn-out liability for the
first earn-out period, which resulted in additional expense of $1.0 million. The contingent consideration of
$9.1 million for the first earn-out period was paid in the second quarter of fiscal 2014.

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 During calendar 2014, which corresponded to AEGs second earn-out period, adverse weather
conditions hindered AEGs ability to complete its project field work. As a result, in the third quarter of
fiscal 2014, we updated our projection of AEGs operating income for its second earn-out period. This
assessment included a review of the status of on-going projects in AEGs backlog, and the inventory of
prospective new contract awards. As a result of this assessment, we concluded that AEGs operating
income in the second earn-out period would be significantly lower than our original estimate at the
acquisition date, and would fall below the minimum operating income threshold, but would still exceed
$9.0 million of operating income in order to earn the additional earn-out payment. As a result, we reduced
the contingent earn-out liability, which resulted in a gain of $8.9 million.

During the fourth quarter of fiscal 2014, we performed an updated projection of AEGs operating
income for its second earn-out period based on actual results and the forecast for the remainder of the
second earn-out period. Based on this analysis, we concluded that AEGs operating income in the second
earn-out period would be lower than the $9.0 million needed to receive the $4.5 million of contingent
consideration that remained accrued for performance in both earn-out years. As a result, we reduced the
contingent earn-out liability to $0, which resulted in a gain of $4.5 million in the fourth quarter of fiscal
2014, and net gains of $12.4 million for all of fiscal 2014.

Each time we determined that AEGs and Parklands operating income would be lower than our
original estimate at the acquisition date, we also evaluated the related goodwill for potential impairment.
In each case, we determined that the lower income projections were the result of temporary events, and
did not negatively impact the reporting units longer term performance or result in goodwill impairment.

Segment Results of Operations

Water, Environment and Infrastructure

Fiscal Year Ended

September 27, September 28, Change
2015 2014 $ %
($ in thousands)

Revenue . . . . . . . . . . . . . $ 993,631 $ 1,018,522 $ (24,891) (2.4)%

Subcontractor costs . . . . . . (230,355) (207,411) (22,944) 11.1
Revenue, net of
subcontractor costs . . . . . $ 763,276 $ 811,111 $ (47,835) (5.9)
Operating income . . . . . . . $ 93,142 $ 93,853 $ (711) (0.8)

Revenue and revenue, net of subcontractor costs, decreased 24.9 million, or 2.4%, and
$47.8 million, or 5.9%, respectively, compared to fiscal 2014. As described above, foreign exchange rate
fluctuations negatively impacted revenue and revenue, net of subcontractor costs, in the amounts of
$29.2 million and $27.3 million, respectively, in fiscal 2015. On a constant currency basis, our revenue
increased $4.3 million, or 0.4%, in fiscal 2015 compared to the previous year. This growth reflects an
increase in revenue from U.S. state and local government infrastructure projects across a broad range of
government agencies.

Operating income decreased $0.7 million, or 0.8%, in fiscal 2015 compared to fiscal 2014. On a
constant currency basis, our operating income increased $1.2 million, or 1.3%. These comparisons are
consistent with the revenue trends as our relative profit margins were stable year-over-year at 12.2% in
fiscal 2015 and 11.6% in fiscal 2014.

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Resource Management and Energy

Fiscal Year Ended

September 27, September 28, Change
2015 2014 $ %
($ in thousands)

Revenue . . . . . . . . . . . . . $ 1,282,046 $ 1,333,127 $ (51,081) (3.8)%

Subcontractor costs . . . . . . (349,882) (363,817) 13,397 (3.8)
Revenue, net of
subcontractor costs . . . . . $ 932,164 $ 969,310 $ (37,146) (3.8)
Operating income . . . . . . . $ 93,359 $ 84,862 $ 8,497 10.0

Revenue and revenue, net of subcontractor costs, decreased $51.1 million, or 3.8%, and
$37.1 million, or 3.8%, respectively, compared to fiscal 2014. Foreign exchange rate fluctuations had an
adverse impact on revenue and revenue, net of subcontractor costs, during fiscal 2015 in the amounts of
$43.2 million and $37.1 million, respectively. On a constant currency basis, revenue decreased $7.9 million,
or 0.6% in fiscal 2015 compared to fiscal 2014. These decreases primarily reflect a decline in mining and
upstream oil and gas revenue, particularly in Canada and Brazil, which were down $58.6 million
year-over-year. These decreases were substantially offset by increased midstream oil and gas revenue in
both the U.S. and Western Canada.

Operating income increased $8.5 million in fiscal 2015 compared to fiscal 2014. This increase
primarily reflects improved profit in our midstream oil and gas business in Western Canada. Further, our
fiscal 2014 results included a $5.3 million profit reversal on a fixed price construction management project.
The operating income increase was partially offset by declines in our other commodity-based activities,
including upstream oil and gas services and mining-related activities.

Remediation and Construction Management

Fiscal Year Ended

September 27, September 28, Change
2015 2014 $ %
($ in thousands)

Revenue . . . . . . . . . . . . . $ 86,575 $ 221,108 $ (134,533) (60.8)%

Subcontractor costs . . . . . . (63,300) (141,611) 78,311 (55.3)
Revenue, net of
subcontractor costs . . . . . $ 23,275 $ 79,497 $ (56,222) (70.7)
Operating loss . . . . . . . . . . $ (8,614) $ (45,151) $ 36,537 80.9

Revenue and revenue, net of subcontractor costs, decreased $134.5 million and $56.2 million,
respectively, compared to the previous year. These decreases resulted from our decision to wind-down the
RCM construction activities. The operating loss in fiscal 2015 reflects our updated evaluation of the
collectability of certain claims as well as related legal costs, and the costs required to complete the
remaining projects in the RCM segment. The operating loss in fiscal 2014 reflects project-related charges
principally from adjustments to estimated costs at completion that increased project costs.

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 In fiscal 2014, primarily in the fourth quarter, we recorded project-related charges principally from
adjustments to estimated costs at completion that increased project costs. These charges included amounts
primarily related to two lines of business in the RCM segment with U.S. federal and state and local
government clients that we decided to exit or wind-down in the fourth quarter of fiscal 2014.

One of the businesses we decided to exit or wind-down related to fixed-price contracts for project
management, construction management, and construction services, primarily for U.S. federal government
clients. In the course of performing the required work, we encountered delays related to defective designs,
permit issues and differing site conditions, among other factors, that slowed our progress. Due to these
delays, we determined that the costs to complete the projects would exceed the contract values. As a result,
we recorded related pre-tax project charges of $20.5 million on these projects in fiscal 2014. These projects
were substantially completed in fiscal 2015.

The other business we decided to exit or wind-down related to fixed-price contracts for
transportation projects with state government agencies. During the execution of these contracts, numerous
issues and events disrupted our plans and progress, including weather delays, differing site conditions,
drainage design changes, lane closure delays, and revised soil testing requirements. These issues caused us
to incur costs in excess of the contract values and increase our estimates of the expected costs to complete.
As a result, we recorded pre-tax charges to operating income of $9.1 million in the fourth quarter of fiscal
2014. These projects are expected to be completed in 2017, with total estimated costs to complete of
approximately $22 million as of October 2, 2016. If our costs increase above this estimate, we could record
further losses.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Capital Requirements. Our primary sources of liquidity are cash flows from operations and
borrowings under our credit facilities. Our primary uses of cash are to fund working capital, capital
expenditures, stock repurchases, cash dividends and repayment of debt, as well as to fund acquisitions and
earn-out obligations from prior acquisitions. We believe that our existing cash and cash equivalents,
operating cash flows and borrowing capacity under our credit agreement, as described below, will be
sufficient to meet our capital requirements for at least the next 12 months. On November 10, 2014, the
Board of Directors authorized a stock repurchase program under which we could repurchase up to
$200 million of our common stock over the succeeding two years, of which $200 million has been
repurchased as of October 2, 2016. During fiscal 2016, we declared and paid dividends totaling $0.34 per
share ($0.08 for the first and second quarters and $0.09 for the third and fourth quarters) of our common
stock. In fiscal 2015, we paid dividends totaling $0.30 per share ($0.07 for the first and second quarters, and
$0.08 for the third and fourth quarters) of our common stock.

Subsequent Events. On November 7, 2016, the Board of Directors declared a quarterly cash
dividend of $0.09 per share payable on December 14, 2016 to stockholders of record as of the close of
business on December 1, 2016. On November 7, 2016, our Board of Directors also authorized a new stock
repurchase program under which we could repurchase up to $200 million of our common stock.

We use a variety of tax planning and financing strategies to manage our worldwide cash and
deploy funds to locations where they are needed. We also indefinitely reinvest our foreign earnings, and
our current plans do not demonstrate a need to repatriate these earnings. Should we require additional
capital in the United States, we may elect to repatriate these foreign funds or raise capital in the United
States through debt or equity. If we were to repatriate these foreign funds, we would be required to accrue
and pay additional U.S. taxes less applicable foreign tax credits.

As of October 2, 2016, cash and cash equivalents were $160.5 million, an increase of $25.1 million
compared to the fiscal 2015 year-end. The increase was due to cash generated from operating activities and

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net borrowing, partially offset by cash used for business acquisitions, share repurchases, capital
expenditures and dividends.

Operating Activities. For fiscal 2016, net cash provided by operating activities was $142.0 million,
a decrease of $20.8 million compared to fiscal 2015. This decrease was due primarily to $30.5 million in
acquisition and integration expenses related to Coffey paid in fiscal 2016.

Investing Activities. Net cash used in investing activities was $94.0 million, an increase of
$73.0 million in fiscal 2016 compared to fiscal 2015. The increase primarily resulted from cash used for the
acquisitions of Coffey and INDUS in the second quarter of fiscal 2016, which totaled $81.3 million.

Financing Activities. For fiscal 2016, net cash used in financing activities was $25.4 million, a
decrease of $98.2 million, compared to the prior year. The decrease primarily relates to increased net
borrowings of $91.2 million for the fiscal 2016 acquisitions previously discussed.

Debt Financing. On May 7, 2013, we entered into a credit agreement that provided for a
$205 million term loan facility and a $460 million revolving credit facility both maturing in May 2018. On
May 29, 2015, we entered into a third amendment to our credit agreement (as amended, the Credit
Agreement) that extended the maturity date for the term loan and the revolving credit facility to May
2020. The Credit Agreement is a $654.8 million senior secured, five-year facility that provides for a
$194.8 million term loan facility (the Term Loan Facility) and a $460 million revolving credit facility (the
Revolving Credit Facility). The Credit Agreement allows us to, among other things, finance certain
permitted open market repurchases of our common stock, permitted acquisitions, and cash dividends and
distributions. The Revolving Credit Facility includes a $150 million sublimit for the issuance of standby
letters of credit, a $20 million sublimit for swingline loans, and a $150 million sublimit for multicurrency
borrowings. The interest rate provisions of the term loan and the revolving credit facility did not materially
change.

The Term Loan Facility is subject to quarterly amortization of principal, with $10.3 million payable
in year 1, and $15.4 million payable in years 2 through 5. The Term Loan may be prepaid at any time
without penalty. We may borrow on the Revolving Credit Facility, at our option, at either (a) a
Eurocurrency rate plus a margin that ranges from 1.15% to 2.00% per annum, or (b) a base rate for loans
in U.S. dollars (the highest of the U.S. federal funds rate plus 0.50% per annum, the banks prime rate or
the Eurocurrency rate plus 1.00%) plus a margin that ranges from 0.15% to 1.00% per annum. In each
case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterly. The Term
Loan Facility is subject to the same interest rate provisions. The interest rate of the Term Loan Facility at
the date of inception was 1.57%. The Credit Agreement expires on May 29, 2020, or earlier at our
discretion, upon payment in full of loans and other obligations.

As of October 2, 2016, we had $346.8 million in outstanding borrowings under the Credit
Agreement, which was comprised of $176.8 million under the Term Loan Facility and $170 million under
the Revolving Credit Facility at a weighted-average interest rate of 1.92% per annum. In addition, we had
$1.3 million in standby letters of credit under the Credit Agreement. Our average effective weighted-
average interest rate on borrowings outstanding at October 2, 2016 under the Credit Agreement, including
the effects of interest rate swap agreements described in Note 13, Derivative Financial Instruments of
the Notes to Consolidated Financial Statements, was 2.52%. At October 2, 2016, we had $288.7 million
of available credit under the Revolving Credit Facility, of which $222.4 million could be borrowed without
a violation of our debt covenants. In addition, we entered into agreements with three banks to issue up to
$53 million in standby letters of credit. The aggregate amount of standby letters of credit outstanding
under these additional facilities and other bank guarantees was $25.3 million, of which $6 million was
issued in currencies other than the U.S. dollar.

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 The Credit Agreement contains certain affirmative and restrictive covenants, and customary
events of default. The financial covenants provide for a maximum Consolidated Leverage Ratio of 3.00 to
1.00 (total funded debt/EBITDA, as defined in the Credit Agreement) and a minimum Consolidated Fixed
Charge Coverage Ratio of 1.25 to 1.00 (EBITDA, as defined in the Credit Agreement minus capital
expenditures/cash interest plus taxes plus principal payments of indebtedness including capital leases, notes
and post-acquisition payments).

At October 2, 2016, we were in compliance with these covenants with a consolidated leverage ratio
of 1.91x and a consolidated fixed charge coverage ratio of 2.82x. Our obligations under the Credit
Agreement are guaranteed by certain of our subsidiaries and are secured by first priority liens on (i) the
equity interests of certain of our subsidiaries, including those subsidiaries that are guarantors or borrowers
under the Credit Agreement, and (ii) our accounts receivable, general intangibles and intercompany loans,
and those of our subsidiaries that are guarantors or borrowers.

At the time of acquisition, Coffey had an existing secured credit facility with a bank, comprised of
an overdraft facility, a term facility and a bank guaranty facility. This facility was amended in March 2016
to extend the term of the existing facility to April 8, 2016, and allow for the issuance of a parent guarantee
and release of certain subsidiary guarantors. On April 8, 2016, the facility was amended again to provide
for a secured AUD$30 million facility, which may be used by Coffey for bank overdrafts, short-term cash
advances or bank guarantees. This facility expires in April 2017, is secured by the assets of certain
Australian and New Zealand subsidiaries, and is supported by a parent guarantee. At October 2, 2016, the
amount outstanding under this facility consisted solely of bank guarantees of $5.6 million.

Inflation. We believe our operations have not been, and, in the foreseeable future, are not
expected to be, materially adversely affected by inflation or changing prices due to the average duration of
our projects and our ability to negotiate prices as contracts end and new contracts begin.

Dividends. Our Board of Directors has authorized the following dividends:

Total Maximum
Dividend Per Share Record Date Payment Payment Date
(in thousands, except per share data)

November 10, 2014 . . . . . . . . . . . $ 0.07 November 26, 2014 $ 4,372 December 15, 2014
January 26, 2015 . . . . . . . . . . . . . $ 0.07 February 11, 2015 $ 4,258 February 26, 2015
April 27, 2015 . . . . . . . . . . . . . . . $ 0.08 May 14, 2015 $ 4,810 May 29, 2015
July 27, 2015 . . . . . . . . . . . . . . . $ 0.08 August 17, 2015 $ 4,799 September 4, 2015
November 9, 2015 . . . . . . . . . . . . $ 0.08 November 30, 2015 $ 4,713 December 11, 2015
January 25, 2016 . . . . . . . . . . . . . $ 0.08 February 12, 2016 $ 4,669 February 26, 2016
April 25, 2016 . . . . . . . . . . . . . . . $ 0.09 May 13, 2016 $ 5,196 May 27, 2016
July 25, 2016 . . . . . . . . . . . . . . . $ 0.09 August 12, 2016 $ 5,157 August 31, 2016
November 7, 2016 . . . . . . . . . . . . $ 0.09 December 1, 2016 N/A December 14, 2016

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 Contractual Obligations. The following sets forth our contractual obligations at October 2, 2016:

Total Year 1 Years 2 - 3 Years 4 - 5 Beyond

(in thousands)
Debt:
Credit facility . . . . . . . . . . . $ 346,813 $ 15,375 $ 30,750 $ 300,688 $
Other debt . . . . . . . . . . . . . 50 50
Interest (1) . . . . . . . . . . . . . 14,292 5,185 7,255 1,852
Capital leases . . . . . . . . . . . . 154 89 65
Operating leases (2) . . . . . . . . . 255,591 83,050 99,603 50,206 22,732
Contingent earn-outs (3) . . . . . 8,757 4,296 4,461
Deferred compensation liability 20,824 20,824
Unrecognized tax benefits (4) . . 18,787 10,814 7,973
Total . . . . . . . . . . . . . . . . . $ 665,268 $ 118,859 $ 142,134 $ 360,719 $ 43,556

(1)
Interest primarily related to the Term Loan Facility is based on a weighted-average interest rate at October 2,
2016, on borrowings that are presently outstanding.
(2)
Predominantly represents real estate leases.
(3)
Represents the estimated fair value recorded for contingent earn-out obligations for acquisitions. The remaining
maximum contingent earn-out obligations for these acquisitions total $15.5 million.
(4)
Represents liabilities for unrecognized tax benefits related to uncertain tax positions, excluding amounts related
primarily to outstanding refund claims. We are unable to reasonably predict the timing of tax settlements, as tax
audits can involve complex issues and the resolution of those issues may span multiple years, particularly if subject
to negotiation or litigation. For more information, see Note 8, Income Taxes of the Notes to Consolidated
Financial Statements included in Item 8.

Income Taxes

We review the realizability of deferred tax assets on a quarterly basis by assessing the need for a
valuation allowance. As of October 2, 2016, we performed our assessment of net deferred tax assets.
Significant management judgment is required in determining the provision for income taxes and, in
particular, any valuation allowance recorded against our deferred tax assets. Applying the applicable
accounting guidance requires an assessment of all available evidence, positive and negative, regarding the
realizability of the net deferred tax assets. Based upon recent results, we concluded that a cumulative loss
in recent years exists in certain states and foreign jurisdictions. We have historically relied on the following
factors in our assessment of the realizability of our net deferred tax assets:

taxable income in prior carryback years as permitted under the tax law;

future reversals of existing taxable temporary differences;

consideration of available tax planning strategies and actions that could be implemented, if
necessary; and

estimates of future taxable income from our operations.

We considered these factors in our estimate of the timing and amount of the reversal of deferred
tax assets, using assumptions that we believe are reasonable and consistent with operating results.
However, as a result of cumulative pre-tax losses in certain foreign jurisdictions for the 36 months ended
October 2, 2016, we concluded that our estimates of future taxable income and certain tax planning
strategies did not constitute sufficient positive evidence to assert that it is more likely than not that certain
deferred tax assets would be realizable before expiration. Based on our assessment, we concluded that it is

65
more likely than not that the assets will be realized except for the assets related to loss carry-forwards in
foreign jurisdictions for which a valuation allowance of $23.8 million has been provided.

We are currently under examination by the Internal Revenue Service for fiscal years 2010 through
2013, and by the California Franchise Tax Board for fiscal years 2004 through 2009. We are also subject to
various other state audits. With a few exceptions, we are no longer subject to U.S. federal, state and local,
or non-U.S. income tax examinations for fiscal years before 2010.

Off-Balance Sheet Arrangements

In the ordinary course of business, we may use off-balance sheet arrangements if we believe that
such an arrangement would be an efficient way to lower our cost of capital or help us manage the overall
risks of our business operations. We do not believe that such arrangements have had a material adverse
effect on our financial position or our results of operations.

The following is a summary of our off-balance sheet arrangements:

Letters of credit and bank guarantees are used primarily to support project performance and
insurance programs. We are required to reimburse the issuers of letters of credit and bank
guarantees for any payments they make under the outstanding letters of credit or bank
guarantees. Our Credit Agreement and additional letter of credit facilities cover the issuance of
our standby letters of credit and bank guarantees and are critical for our normal operations. If
we default on the Credit Agreement or additional credit facilities, our inability to issue or renew
standby letters of credit and bank guarantees would impair our ability to maintain normal
operations. At October 2, 2016, we had $1.3 million in standby letters of credit outstanding
under our Credit Agreement, $25.3 million in standby letters of credit outstanding under our
additional letter of credit facilities and $5.6 million of bank guarantees under the existing Coffey
facility.

From time to time, we provide guarantees and indemnifications related to our services. If our
services under a guaranteed or indemnified project are later determined to have resulted in a
material defect or other material deficiency, then we may be responsible for monetary damages
or other legal remedies. When sufficient information about claims on guaranteed or
indemnified projects is available and monetary damages or other costs or losses are determined
to be probable, we recognize such guaranteed losses.

In the ordinary course of business, we enter into various agreements as part of certain
unconsolidated subsidiaries, joint ventures, and other jointly executed contracts where we are
jointly and severally liable. We enter into these agreements primarily to support the project
execution commitments of these entities. The potential payment amount of an outstanding
performance guarantee is typically the remaining cost of work to be performed by or on behalf
of third parties under engineering and construction contracts. However, we are not able to
estimate other amounts that may be required to be paid in excess of estimated costs to complete
contracts and, accordingly, the total potential payment amount under our outstanding
performance guarantees cannot be estimated. For cost-plus contracts, amounts that may
become payable pursuant to guarantee provisions are normally recoverable from the client for
work performed under the contract. For lump sum or fixed-price contracts, this amount is the
cost to complete the contracted work less amounts remaining to be billed to the client under the
contract. Remaining billable amounts could be greater or less than the cost to complete. In
those cases where costs exceed the remaining amounts payable under the contract, we may have
recourse to third parties, such as owners, co-venturers, subcontractors or vendors, for claims.

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 In the ordinary course of business, our clients may request that we obtain surety bonds in
connection with contract performance obligations that are not required to be recorded in our
consolidated balance sheets. We are obligated to reimburse the issuer of our surety bonds for
any payments made thereunder. Each of our commitments under performance bonds generally
ends concurrently with the expiration of our related contractual obligation.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of our financial statements in conformity with U.S. GAAP requires us to make
estimates and assumptions in the application of certain accounting policies that affect amounts reported in
our consolidated financial statements and accompanying footnotes included in Item 8 of this report. In
order to understand better the changes that may occur to our financial condition, results of operations and
cash flows, readers should be aware of the critical accounting policies we apply and estimates we use in
preparing our consolidated financial statements. Although such estimates and assumptions are based on
managements best knowledge of current events and actions we may undertake in the future, actual results
could differ materially from those estimates.

Our significant accounting policies are described in the Notes to Consolidated Financial
Statements included in Item 8. Highlighted below are the accounting policies that management considers
most critical to investors understanding of our financial results and condition, and that require complex
judgments by management.

Revenue Recognition and Contract Costs

We recognize revenue for most of our contracts using the percentage-of-completion method,
primarily based on contract costs incurred to date compared to total estimated contract costs. We generally
utilize the cost-to-cost approach to estimate the progress towards completion in order to determine the
amount of revenue and profit to recognize. This method of revenue recognition requires us to prepare
estimates of costs to complete contracts in progress. In making such estimates, judgments are required to
evaluate contingencies such as potential variances in schedule; the cost of materials and labor productivity;
and the impact of change orders, liability claims, contract disputes and achievement of contractual
performance standards. Changes in total estimated contract cost and losses, if any, could materially impact
our results of operations or financial position. Certain of our contracts are service-related contracts, such
as providing operations and maintenance services or a variety of technical assistance services. Our service
contracts are accounted for using the proportional performance method under which revenue is
recognized in proportion to the number of service activities performed, in proportion to the direct costs of
performing the service activities, or evenly across the period of performance depending upon the nature of
the services provided.

We recognize revenue for work performed under three major types of contracts: fixed-price,
time-and-materials and cost-plus.

Fixed-Price. We enter into two major types of fixed-price contracts: firm fixed-price (FFP) and
fixed-price per unit (FPPU). Under FFP contracts, our clients pay us an agreed fixed-amount negotiated
in advance for a specified scope of work. We generally recognize revenue on FFP contracts using the
percentage-of-completion method. If the nature or circumstances of the contract prevent us from
preparing a reliable estimate at completion, we will delay profit recognition until adequate information
about the contracts progress becomes available. Under our FPPU contracts, clients pay us a set fee for
each service or production transaction that we complete. Accordingly, we recognize revenue under FPPU
contracts as we complete the related service or production transactions, generally using the proportional
performance method.

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 Time-and-Materials. Under time-and-materials contracts, we negotiate hourly billing rates and
charge our clients based on the actual time that we spend on a project. In addition, clients reimburse us for
our actual out-of-pocket costs of materials and other direct incidental expenditures that we incur in
connection with our performance under the contract. The majority of our time-and-material contracts are
subject to maximum contract values and, accordingly, revenue under these contracts is generally
recognized under the percentage-of-completion method. However, time and materials contracts that are
service-related contracts are accounted for utilizing the proportional performance method. Revenue on
contracts that are not subject to maximum contract values is recognized based on the actual number of
hours we spend on the projects plus any actual out-of-pocket costs of materials and other direct incidental
expenditures that we incur on the projects. Our time-and-materials contracts also generally include annual
billing rate adjustment provisions.

Cost-Plus. Under cost-plus contracts, we are reimbursed for allowable or otherwise defined costs
incurred plus a negotiated fee. The contracts may also include incentives for various performance criteria,
including quality, timeliness, ingenuity, safety and cost-effectiveness. In addition, our costs are generally
subject to review by our clients and regulatory audit agencies, and such reviews could result in costs being
disputed as non-reimbursable under the terms of the contract. Revenue for cost-plus contracts is
recognized at the time services are performed. Revenue is not recognized for non-recoverable costs.
Performance incentives are included in our estimates of revenue when their realization is reasonably
assured.

If estimated total costs on any contract indicate a loss, we recognize the entire estimated loss in
the period the loss becomes known. The cumulative effect of revisions to revenue, estimated costs to
complete contracts, including penalties, incentive awards, change orders, claims, anticipated losses and
others are recorded in the period in which the revisions are identified and the loss can be reasonably
estimated. Such revisions could occur in any reporting period and the effects may be material depending
on the size of the project or the adjustment.

Once contract performance is underway, we may experience changes in conditions, client

requirements, specifications, designs, materials and expectations regarding the period of performance.
Such changes are change orders and may be initiated by us or by our clients. In many cases, agreement
with the client as to the terms of change orders is reached prior to work commencing; however, sometimes
circumstances require that work progress without obtaining client agreement. Revenue related to change
orders is recognized as costs are incurred. Change orders that are unapproved as to both price and scope
are evaluated as claims.

Claims are amounts in excess of agreed contract prices that we seek to collect from our clients or
other third parties for delays, errors in specifications and designs, contract terminations, change orders in
dispute or unapproved as to both scope and price or other causes of unanticipated additional costs.
Revenue on claims is recognized only to the extent that contract costs related to the claims have been
incurred and when it is probable that the claim will result in a bona fide addition to contract value that can
be reliably estimated. No profit is recognized on a claim until final settlement occurs. This can lead to a
situation in which costs are recognized in one period and revenue is recognized in a subsequent period
when a client agreement is obtained or a claim resolution occurs.

Insurance Matters, Litigation and Contingencies

In the normal course of business, we are subject to certain contractual guarantees and litigation.
Generally, such guarantees relate to project schedules and performance. Most of the litigation involves us
as a defendant in contractual disagreements, workers compensation, personal injury and other similar
lawsuits. We maintain insurance coverage for various aspects of our business and operations. However, we
have elected to retain a portion of losses that may occur through the use of various deductibles, limits and

68
retentions under our insurance programs. This practice may subject us to some future liability for which we
are only partially insured or are completely uninsured.

We record in our consolidated balance sheets amounts representing our estimated liability for
self-insurance claims. We utilize actuarial analyses to assist in determining the level of accrued liabilities to
establish for our employee medical and workers compensation self-insurance claims that are known and
have been asserted against us, as well as for self-insurance claims that are believed to have been incurred
based on actuarial analyses but have not yet been reported to our claims administrators at the balance
sheet date. We include any adjustments to such insurance reserves in our consolidated results of
operations.

Except as described in Note 18, Commitments and Contingencies of the Notes to Consolidated
Financial Statements included in Item 8, we do not have any litigation or other contingencies that have
had, or are currently anticipated to have, a material impact on our results of operations or financial
position. As additional information about current or future litigation or other contingencies becomes
available, management will assess whether such information warrants the recording of additional expenses
relating to those contingencies. Such additional expenses could potentially have a material impact on our
results of operations and financial position.

Stock-Based Compensation

Our stock-based compensation plans include stock options, restricted stock, restricted stock units
(RSUs), performance share units (PSUs), and an employee stock purchase plan for our eligible
employees and outside directors. Stock-based compensation cost is measured at the grant date based on
the fair value of the award and is recognized as expense over the requisite service period. Determining the
fair value of stock-based awards at the grant date requires management to make assumptions and apply
judgment to determine the fair value of our awards. These assumptions and judgments include future
employee turnover rates, along with estimating the future volatility of our stock price, future stock option
exercise behaviors and, for performance-based awards, the achievement of company performance goals.
Our stock-based compensation expense was $13.0 million, $10.9 million and $10.4 million for fiscal 2016,
2015 and 2014, respectively.

Goodwill and Intangibles

The cost of an acquired company is assigned to the tangible and intangible assets purchased and
the liabilities assumed on the basis of their fair values at the date of acquisition. The determination of fair
values of assets and liabilities acquired requires us to make estimates and use valuation techniques when a
market value is not readily available. Any excess of purchase price over the fair value of net tangible and
intangible assets acquired is allocated to goodwill. Goodwill typically represents the value paid for the
assembled workforce and enhancement of our service offerings.

Identifiable intangible assets include backlog, non-compete agreements, client relations, trade
names, patents and other assets. The costs of these intangible assets are amortized over their contractual
or economic lives, which range from one to ten years. We assess the recoverability of the unamortized
balance of our intangible assets when indicators of impairment are present based on expected future
profitability and undiscounted expected cash flows and their contribution to our overall operations. Should
the review indicate that the carrying value is not fully recoverable, the excess of the carrying value over the
fair value of the intangible assets would be recognized as an impairment loss.

We perform our annual goodwill impairment review at the beginning of our fiscal fourth quarter.
In addition, we regularly evaluate whether events and circumstances have occurred that may indicate a
potential change in recoverability of goodwill. We perform interim goodwill impairment reviews between

69
our annual reviews if certain events and circumstances have occurred, including a deterioration in general
economic conditions, an increased competitive environment, a change in management, key personnel,
strategy or customers, negative or declining cash flows, or a decline in actual or planned revenue or
earnings compared with actual and projected results of relevant prior periods (see Note 6, Goodwill and
Intangible Assets of the Notes to Consolidated Financial Statements in Item 8 for further discussion).

We believe the methodology that we use to review impairment of goodwill, which includes a
significant amount of judgment and estimates, provides us with a reasonable basis to determine whether
impairment has occurred. However, many of the factors employed in determining whether our goodwill is
impaired are outside of our control and it is reasonably likely that assumptions and estimates will change in
future periods. These changes could result in future impairments.

The goodwill impairment review involves the determination of the fair value of our reporting
units, which for us are the components one level below our reportable segments. This process requires us
to make significant judgments and estimates, including assumptions about our strategic plans with regard
to our operations as well as the interpretation of current economic indicators and market valuations.
Furthermore, the development of the present value of future cash flow projections includes assumptions
and estimates derived from a review of our expected revenue growth rates, profit margins, business plans,
cost of capital and tax rates. We also make certain assumptions about future market conditions, market
prices, interest rates and changes in business strategies. Changes in assumptions or estimates could
materially affect the determination of the fair value of a reporting unit. This could eliminate the excess of
fair value over carrying value of a reporting unit entirely and, in some cases, result in impairment. Such
changes in assumptions could be caused by a loss of one or more significant contracts, reductions in
government or commercial client spending, or a decline in the demand for our services due to changing
economic conditions. In the event that we determine that our goodwill is impaired, we would be required
to record a non-cash charge that could result in a material adverse effect on our results of operations or
financial position.

We use two methods to determine the fair value of our reporting units: (i) the Income Approach
and (ii) the Market Approach. While each of these approaches is initially considered in the valuation of
the business enterprises, the nature and characteristics of the reporting units indicate which approach is
most applicable. The Income Approach utilizes the discounted cash flow method, which focuses on the
expected cash flow of the reporting unit. In applying this approach, the cash flow available for distribution
is calculated for a finite period of years. Cash flow available for distribution is defined, for purposes of this
analysis, as the amount of cash that could be distributed as a dividend without impairing the future
profitability or operations of the reporting unit. The cash flow available for distribution and the terminal
value (the value of the reporting unit at the end of the estimation period) are then discounted to present
value to derive an indication of the value of the business enterprise. The Market Approach is comprised of
the guideline company method and the similar transactions method. The guideline company method
focuses on comparing the reporting unit to select reasonably similar (or guideline) publicly traded
companies. Under this method, valuation multiples are (i) derived from the operating data of selected
guideline companies; (ii) evaluated and adjusted based on the strengths and weaknesses of the reporting
units relative to the selected guideline companies; and (iii) applied to the operating data of the reporting
unit to arrive at an indication of value. In the similar transactions method, consideration is given to prices
paid in recent transactions that have occurred in the reporting units industry or in related industries. For
our annual impairment analysis, we weighted the Income Approach and the Market Approach at 70% and
30%, respectively. The Income Approach was given a higher weight because it has the most direct
correlation to the specific economics of the reporting unit, as compared to the Market Approach, which is
based on multiples of broad-based (i.e., less comparable) companies. Our last review at June 27, 2016
(i.e. the first day of our fourth quarter in fiscal 2016), indicated that we had no impairment of goodwill, and
all of our reporting units had estimated fair values that were in excess of their carrying values, including

70
goodwill. We had no reporting units that had estimated fair values that exceeded their carrying values by
less than 20%, excluding the impact of acquisitions completed within the last two fiscal years.

Contingent Consideration. Certain of our acquisition agreements include contingent earn-out

arrangements, which are generally based on the achievement of future operating income thresholds. The
contingent earn-out arrangements are based upon our valuations of the acquired companies and reduce
the risk of overpaying for acquisitions if the projected financial results are not achieved.

The fair values of these earn-out arrangements are included as part of the purchase price of the
acquired companies on their respective acquisition dates. For each transaction, we estimate the fair value
of contingent earn-out payments as part of the initial purchase price and record the estimated fair value of
contingent consideration as a liability in Estimated contingent earn-out liabilities and Long-term
estimated contingent earn-out liabilities on the consolidated balance sheets. We consider several factors
when determining that contingent earn-out liabilities are part of the purchase price, including the
following: (1) the valuation of our acquisitions is not supported solely by the initial consideration paid, and
the contingent earn-out formula is a critical and material component of the valuation approach to
determining the purchase price; and (2) the former shareholders of acquired companies that remain as key
employees receive compensation other than contingent earn-out payments at a reasonable level compared
with the compensation of our other key employees. The contingent earn-out payments are not affected by
employment termination.

We measure our contingent earn-out liabilities at fair value on a recurring basis using significant
unobservable inputs classified within Level 3 of the fair value hierarchy (See Note 2, Basis of Presentation
and Preparation Fair Value of Financial Instruments of the Notes to Consolidated Financial
Statements included in Item 8). We use a probability weighted discounted income approach as a valuation
technique to convert future estimated cash flows to a single present value amount. The significant
unobservable inputs used in the fair value measurements are operating income projections over the
earn-out period (generally two or three years), and the probability outcome percentages we assign to each
scenario. Significant increases or decreases to either of these inputs in isolation would result in a
significantly higher or lower liability with a higher liability capped by the contractual maximum of the
contingent earn-out obligation. Ultimately, the liability will be equivalent to the amount paid, and the
difference between the fair value estimate and amount paid will be recorded in earnings. The amount paid
that is less than or equal to the liability on the acquisition date is reflected as cash used in financing
activities in our consolidated statements of cash flows. Any amount paid in excess of the liability on the
acquisition date is reflected as cash used in operating activities.

We review and re-assess the estimated fair value of contingent consideration on a quarterly basis,
and the updated fair value could differ materially from the initial estimates. Changes in the estimated fair
value of our contingent earn-out liabilities related to the time component of the present value calculation
are reported in interest expense. Adjustments to the estimated fair value related to changes in all other
unobservable inputs are reported in operating income.

Income Taxes

We file a consolidated U.S. federal income tax return and a combined California franchise tax
return. In addition, we file other returns that are required in the states, foreign jurisdictions and other
jurisdictions in which we do business. We account for certain income and expense items differently for
financial reporting and income tax purposes. Deferred tax assets and liabilities are computed for the
differences between the financial statement and tax bases of assets and liabilities that will result in taxable
or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which
the differences are expected to reverse. In determining the need for a valuation allowance on deferred tax
assets, management reviews both positive and negative evidence, including current and historical results of

71
operations, future income projections and potential tax planning strategies. Based on our assessment, we
have concluded that a portion of the deferred tax assets at October 2, 2016, primarily net operating losses
and certain foreign intangibles, will not be realized, and we have reserved accordingly.

According to the authoritative guidance on accounting for uncertainty in income taxes, we may
recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax
position will be sustained on examination by the taxing authorities based on the technical merits of the
position. The tax benefits recognized in the financial statements from such a position should be measured
based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate
settlement. For more information related to our unrecognized tax benefits, see Note 8, Income Taxes of
the Notes to Consolidated Financial Statements included in Item 8.

RECENT ACCOUNTING PRONOUNCEMENTS

For a discussion of recent accounting standards and the effect they could have on the consolidated
financial statements, see Note 2, Basis of Presentation and Preparation of the Notes to Consolidated
Financial Statements included in Item 8.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We do not enter into derivative financial instruments for trading or speculation purposes. In the
normal course of business, we have exposure to both interest rate risk and foreign currency transaction and
translation risk, primarily related to the Canadian and Australian dollar.

We are exposed to interest rate risk under our Credit Agreement. We can borrow, at our option,
under both the Term Loan Facility and Revolving Credit Facility. We may borrow on the Revolving Credit
Facility, at our option, at either (a) a Eurocurrency rate plus a margin that ranges from 1.15% to 2.00% per
annum, or (b) a base rate for loans in U.S. dollars (the highest of the U.S. federal funds rate plus 0.50%
per annum, the banks prime rate or the Eurocurrency rate plus 1.00%) plus a margin that ranges from
0.15% to 1.00% per annum. Borrowings at the base rate have no designated term and may be repaid
without penalty any time prior to the Facilitys maturity date. Borrowings at a Eurodollar rate have a term
no less than 30 days and no greater than 90 days. Typically, at the end of such term, such borrowings may
be rolled over at our discretion into either a borrowing at the base rate or a borrowing at a Eurodollar rate
with similar terms, not to exceed the maturity date of the Facility. The Facility matures on May 29, 2020. At
October 2, 2016 we had borrowings outstanding under the Credit Agreement of $346.8 million at a
weighted-average interest rate of 1.92% per annum.

In fiscal 2013, we entered into three interest rate swap agreements with three banks to fix the
variable interest rate on $153.8 million of our Term Loan Facility. In fiscal 2014, we entered into two
interest rate swap agreements with two banks to fix the variable interest rate on $51.3 million of our Term
Loan Facility. The objective of these interest rate swaps was to eliminate the variability of our cash flows
on the amount of interest expense we pay under our Credit Agreement. Our average effective interest rate
on borrowings outstanding under the Credit Agreement, including the effects of interest rate swap
agreements, at October 2, 2016 was 2.52%. For more information, see Note 14, Derivative Financial
Instruments of the Notes to Consolidated Financial Statements in Item 8.

Most of our transactions are in U.S. dollars; however, some of our subsidiaries conduct business in
foreign currencies, primarily the Canadian and Australian dollar. Therefore, we are subject to currency
exposure and volatility because of currency fluctuations. We attempt to minimize our exposure to these
fluctuations by matching revenue and expenses in the same currency for our contracts. Foreign currency
gains and losses were immaterial for both fiscal 2016 and 2015. Foreign currency gains and losses are

72
reported as part of Selling, general and administrative expenses in our consolidated statements of
income.

We have foreign currency exchange rate exposure in our results of operations and equity primarily
as a result of the currency translation related to our foreign subsidiaries where the local currency is the
functional currency. To the extent the U.S. dollar strengthens against foreign currencies, the translation of
these foreign currency denominated transactions will result in reduced revenue, operating expenses, assets
and liabilities. Similarly, our revenue, operating expenses, assets and liabilities will increase if the U.S.
dollar weakens against foreign currencies. For 2016 and 2015, 28.1% and 24.6% of our consolidated
revenue, respectively, was generated by our international business. For fiscal 2016, the effect of foreign
exchange rate translation on the consolidated balance sheets was an increase in equity of $15.2 million
compared to a reduction in equity of $100.8 million in fiscal 2015. These amounts were recognized as an
adjustment to equity through other comprehensive income.

73
Item 8. Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

Page
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Consolidated Balance Sheets at October 2, 2016 and September 27, 2015 . . . . . . . . . . . . . . . . . 77

Consolidated Statements of Income for each of the three years in the period ended October 2,
2016, September 27, 2015 and September 28, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Consolidated Statements of Comprehensive Income (Loss) for each of the three years in the
period ended October 2, 2016, September 27, 2015 and September 28, 2014 . . . . . . . . . . . . . 79

Consolidated Statements of Equity for each of the three years in the period ended October 2,
2016, September 27, 2015 and September 28, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Consolidated Statements of Cash Flows for each of the three years in the period ended
October 2, 2016, September 27, 2015 and September 28, 2014 . . . . . . . . . . . . . . . . . . . . . . . . 81

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Schedule II Valuation and Qualifying Accounts and Reserves . . . . . . . . . . . . . . . . . . . . . . . . . 127

74
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders of Tetra Tech, Inc.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated
statements of income, comprehensive income (loss), equity and cash flows present fairly, in all material
respects, the financial position of Tetra Tech, Inc. and its subsidiaries at October 2, 2016 and September 27,
2015, and the results of their operations and their cash flows for each of the three years in the period
ended October 2, 2016 in conformity with accounting principles generally accepted in the United States of
America. In addition, in our opinion, the financial statement schedule listed in the accompanying index
presents fairly, in all material respects, the information set forth therein when read in conjunction with the
related consolidated financial statements. Also in our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of October 2, 2016, based on criteria
established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). The Companys management is responsible for
these financial statements and financial statement schedule, for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness of internal control over financial reporting,
included in Managements Report on Internal Control over Financial Reporting, appearing under Item 9A
of this Form 10-K. Our responsibility is to express opinions on these financial statements, on the financial
statement schedule, and on the Companys internal control over financial reporting based on our
integrated audits. We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free of material misstatement
and whether effective internal control over financial reporting was maintained in all material respects. Our
audits of the financial statements included examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audits also included performing
such other procedures as we considered necessary in the circumstances. We believe that our audits provide
a reasonable basis for our opinions.

A companys internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A companys internal
control over financial reporting includes those policies and procedures that (i) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with authorizations
of management and directors of the company; and (iii) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have
a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or
detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.

75
 As described in Managements Report on Internal Control over Financial Reporting, management
has excluded Coffey International Limited (Coffey) and INDUS Corporation (INDUS) from its
assessment of internal control over financial reporting as of October 2, 2016 because they were acquired by
the Company in purchase business combinations during 2016. We have also excluded Coffey and INDUS
from our audit of internal control over financial reporting. Coffey and INDUS are wholly-owned
subsidiaries of Tetra Tech, Inc. whose combined total assets and total revenues represent 5.8% and 12.4%,
respectively, of the related consolidated financial statement amounts as of and for the year ended
October 2, 2016.

/s/ PRICEWATERHOUSECOOPERS LLP

Los Angeles, California

November 22, 2016

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 TETRA TECH, INC.
Consolidated Balance Sheets
(in thousands, except par value)

October 2, September 27,

ASSETS 2016 2015
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 160,459 $ 135,326
Accounts receivable net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 714,336 636,030
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . 46,262 42,125
Income taxes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,371 10,294
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 935,428 823,775
Property and equipment net . . . . . . . . . . . .......... . . . . . . . . 67,827 64,906
Investments in and advances to unconsolidated joint ventures . . . . . . . . 2,064 1,886
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . .......... . . . . . . . . 717,988 601,379
Intangible assets net . . . . . . . . . . . . . . . . . .......... . . . . . . . . 48,962 40,332
Deferred income taxes . . . . . . . . . . . . . . . . .......... . . . . . . . . 630
Other long-term assets . . . . . . . . . . . . . . . . .......... . . . . . . . . 27,880 26,964
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,800,779 $ 1,559,242

LIABILITIES AND EQUITY

Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 158,773 $ 150,284
Accrued compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129,184 103,866
Billings in excess of costs on uncompleted contracts . . . . . . . . . . . . . 88,223 93,989
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,787
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . 15,510 11,904
Current contingent earn-out liabilities . . . . . . . . . . . . . . . . . . . . . . 4,296 609
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,100 69,003
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481,086 450,442

Deferred income taxes . . . . . ....... . . . . . . . . . . . . . . . . . . . . . . 60,348 34,759

Long-term debt . . . . . . . . . . ....... . . . . . . . . . . . . . . . . . . . . . . 331,501 180,972
Long-term contingent earn-out liabilities . . . . . . . . . . . . . . . . . . . . . . 4,461 3,560
Other long-term liabilities . . . ....... . . . . . . . . . . . . . . . . . . . . . . 53,980 32,711
Commitments and contingencies (Note 18)
Equity:
Preferred stock Authorized, 2,000 shares of $0.01 par value; no
shares issued and outstanding at October 2, 2016 and September 27,
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock Authorized, 150,000 shares of $0.01 par value; issued
and outstanding, 57,042 and 59,381 shares at October 2, 2016 and
September 27, 2015, respectively . . . . . . . . . . . . . . . . . . . . . . . . . 570 594
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260,340 326,593
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . (128,008) (143,171)
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 736,357 672,309
Tetra Tech stockholders equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 869,259 856,325
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 473
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 869,403 856,798
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,800,779 $ 1,559,242

See accompanying Notes to Consolidated Financial Statements.

77
 TETRA TECH, INC.
Consolidated Statements of Income
(in thousands, except per share data)

Fiscal Year Ended

October 2, September 27, September 28,
2016 2015 2014

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,583,469 $ 2,299,321 $ 2,483,814

Subcontractor costs . . . . . . . . . . . . . . . . . . . . . . . . . (654,264) (580,606) (623,896)
Other costs of revenue . . . . . . . . . . . . . . . . . . . . . . . (1,598,994) (1,402,925) (1,577,481)
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330,211 315,790 282,437
Selling, general and administrative expenses . . . . . . . . (171,985) (170,456) (187,298)
Acquisition and integration expenses . . . . . . . . . . . . . (19,548)
Contingent consideration fair value adjustments . . . . (2,823) 3,113 58,694
Impairment of goodwill and other intangible assets . . . . (60,763)
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . 135,855 87,684 153,833
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 996 680 804
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,385) (8,043) (10,294)
Income before income tax expense . . . . . . . . . . . . . 124,466 80,321 144,343
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . (40,613) (41,093) (35,668)
Net income including noncontrolling interests . . . . . . 83,853 39,228 108,675
Net income from noncontrolling interests . . . . . . . . . (70) (154) (409)

Net income attributable to Tetra Tech . . . . . . . . . . . $ 83,783 $ 39,074 $ 108,266

Earnings per share attributable to Tetra Tech:

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.44 $ 0.64 $ 1.68
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.42 $ 0.64 $ 1.66

Weighted-average common shares outstanding:

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,186 60,913 64,379
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,966 61,532 65,146

Cash dividends paid per share . . . . . . . . . . . . . . . . . . $ 0.34 $ 0.30 $ 0.14

See accompanying Notes to Consolidated Financial Statements.

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 TETRA TECH, INC.
Consolidated Statements of Comprehensive Income (Loss)
(in thousands)

Fiscal Year Ended

October 2, September 27, September 28,
2016 2015 2014

Net income including noncontrolling interests . . . . . . $ 83,853 $ 39,228 $ 108,675

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments . . . . . . . . 14,392 (98,287) (45,480)
Gain (loss) on cash flow hedge valuations . . . . . . . 774 (2,489) 1,029
Other comprehensive income (loss), net of tax . . 15,166 (100,776) (44,451)

Comprehensive income (loss) including

noncontrolling interests . . . . . . . . . . . . . . . 99,019 (61,548) 64,224
Net income attributable to noncontrolling interests . . . (70) (154) (409)
Foreign currency translation adjustments, net of tax . . (3) 143 55
Comprehensive income attributable to
noncontrolling interests . . . . . . . . . . . . . . . (73) (11) (354)

Comprehensive income (loss) attributable to

Tetra Tech . . . . . . . . . . . . . . . . . . . . . . . . $ 98,946 $ (61,559) $ 63,870

See accompanying Notes to Consolidated Financial Statements.

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 TETRA TECH, INC.
Consolidated Statements of Equity
Fiscal Years Ended September 28, 2014, September 27, 2015, and October 2, 2016
(in thousands)

Accumulated
Additional Other Total
Common Stock
Paid-in Comprehensive Retained Tetra Tech Non-Controlling Total
Shares Amount Capital Income (Loss) Earnings Equity Interests Equity

BALANCE AT SEPTEMBER 29, 2013 . . . . 64,134 $ 641 $ 443,099 $ 1,858 $552,165 $ 997,763 $ 1,040 $ 998,803

Comprehensive income, net of tax:

Net income . . . . . . . . . . . . . . . . . . . 108,266 108,266 409 108,675
Foreign currency translation adjustments . (45,425) (45,425) (55) (45,480)
Gain on cash flow hedge valuations . . . . 1,029 1,029 1,029
Comprehensive income, net of tax . . . . . . 63,870 354 64,224
Distributions paid to noncontrolling interests (417) (417)
Cash dividend of $0.14 per common share . (8,956) (8,956) (8,956)
Stock-based compensation . . . . . . . . . . . 10,374 10,374 10,374
Stock options exercised . . . . . . . . . . . . . 1,263 13 22,956 22,969 22,969
Shares issued for Employee Stock Purchase
Plan . . . . . . . . . . . . . . . . . . . . . . . 246 2 5,597 5,599 5,599
Stock repurchases . . . . . . . . . . . . . . . . (3,052) (30) (79,970) (80,000) (80,000)
Tax expense for stock options . . . . . . . . . 460 460 460
BALANCE AT SEPTEMBER 28, 2014 . . . . 62,591 626 402,516 (42,538) 651,475 1,012,079 977 1,013,056

Comprehensive income, net of tax:

Net income . . . . . . . . . . . . . . . . . . . 39,074 39,074 154 39,228
Foreign currency translation adjustments . (98,144) (98,144) (143) (98,287)
Loss on cash flow hedge valuations . . . . (2,489) (2,489) (2,489)
Comprehensive income (loss), net of tax . . . (61,559) 11 (61,548)
Distributions paid to noncontrolling interests (515) (515)
Cash dividends of $0.30 per common share . (18,240) (18,240) (18,240)
Stock-based compensation . . . . . . . . . . . 10,926 10,926 10,926
Stock options exercised . . . . . . . . . . . . . 510 5 8,985 8,990 8,990
Shares issued for Employee Stock Purchase
Plan . . . . . . . . . . . . . . . . . . . . . . . 243 3 5,200 5,203 5,203
Stock repurchases . . . . . . . . . . . . . . . . (3,963) (40) (100,460) (100,500) (100,500)
Tax benefit for stock options . . . . . . . . . . (574) (574) (574)
BALANCE AT SEPTEMBER 27, 2015 . . . . 59,381 594 326,593 (143,171) 672,309 856,325 473 856,798

Comprehensive income, net of tax:

Net income . . . . . . . . . . . . . . . . . . . 83,783 83,783 70 83,853
Foreign currency translation adjustments . 14,389 14,389 3 14,392
Gain on cash flow hedge valuations . . . . 774 774 774
Comprehensive income, net of tax . . . . . . 98,946 73 99,019
Distributions paid to noncontrolling interests (402) (402)
Cash dividends of $0.34 per common share . (19,735) (19,735) (19,735)
Stock-based compensation . . . . . . . . . . . 12,964 12,964 12,964
Stock options exercised . . . . . . . . . . . . . 920 9 15,814 15,823 15,823
Shares issued for Employee Stock Purchase
Plan . . . . . . . . . . . . . . . . . . . . . . . 209 2 4,705 4,707 4,707
Stock repurchases . . . . . . . . . . . . . . . . (3,468) (35) (99,465) (99,500) (99,500)
Tax benefit for stock options . . . . . . . . . . (271) (271) (271)
BALANCE AT OCTOBER 2, 2016 . . . . . . 57,042 $ 570 $ 260,340 $ (128,008) $736,357 $ 869,259 $ 144 $ 869,403

See accompanying Notes to Consolidated Financial Statements.

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 TETRA TECH, INC.
Consolidated Statements of Cash Flows
(in thousands)

Fiscal Year Ended

October 2, September 27, September 28,
2016 2015 2014
Cash flows from operating activities:
Net income including noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . $ 83,853 $ 39,228 $ 108,675
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,588 44,201 54,540
Equity in income of unconsolidated joint ventures . . . . . . . . . . . . . . . . . . . (1,652) (5,131) (2,804)
Distributions of earnings from unconsolidated joint ventures . . . . . . . . . . . . 2,796 5,252 2,724
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,964 10,926 10,374
Excess tax benefits from stock-based compensation . . . . . . . . . . . . . . . . . . (918) (172) (904)
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,051 8,412 (145)
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,082 (1,034) 1,467
Impairment of goodwill and other intangible assets . . . . . . . . . . . . . . . . . . 60,763
Fair value adjustments to contingent consideration . . . . . . . . . . . . . . . . . . . 2,823 (3,113) (58,694)
Lease termination costs and related asset impairment . . . . . . . . . . . . . . . . . 2,946 342 2,416
(Gain) loss on disposal of property and equipment . . . . . . . . . . . . . . . . . . (537) (6,014) 58
Changes in operating assets and liabilities, net of effects of business acquisitions:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,062 40,345 (32,020)
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,720 12,970 (4,481)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,002) (26,901) 31,772
Accrued compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,434 (7,676) (4,728)
Billings in excess of costs on uncompleted contracts . . . . . . . . . . . . . . . . . . (13,874) (10,319) 23,833
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,321) (7,143) (9,419)
Income taxes receivable/payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,995) 7,911 4,712
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . 142,020 162,847 127,376
Cash flows from investing activities:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,945) (24,296) (19,404)
Payments for business acquisitions, net of cash acquired . . . . . . . . . . . . . . . (81,259) (11,680) (30,251)
Changes in restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,519) 4,530
Proceeds from sale of property and equipment . . . . . . . . . . . . . . . . . . . . . 3,076 10,426 4,594
Payment received on note from sale of operation . . . . . . . . . . . . . . . . . . . . 3,900
Investments in unconsolidated joint ventures . . . . . . . . . . . . . . . . . . . . . . (1,368)
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . (94,015) (21,020) (41,161)
Cash flows from financing activities:
Payments on long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (148,485) (75,459) (4,379)
Proceeds from borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229,049 64,794
Payments of contingent earn-out liabilities . . . . . . . . . . . . . . . . . . . . . . . . (3,251) (3,199) (18,663)
Debt pre-payment costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,935) (1,457)
Distributions paid to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . (402) (515) (417)
Excess tax benefits from stock-based compensation . . . . . . . . . . . . . . . . . . 918 172 904
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (99,500) (100,500) (80,000)
Net proceeds from issuance of common stock . . . . . . . . . . . . . . . . . . . . . . 17,953 10,825 23,834
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,735) (18,240) (8,956)
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . (25,388) (123,579) (87,677)
Effect of foreign exchange rate changes on cash . . . . . . . . . . . . . . . . . . . . . . . 2,516 (5,301) (5,464)
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . 25,133 12,947 (6,926)
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . 135,326 122,379 129,305
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 160,459 $ 135,326 $ 122,379
Supplemental information:
Cash paid during the year for:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,575 $ 7,323 $ 8,293
Income taxes, net of refunds of $3.2 million, $5.4 million and $14.7 million . . . $ 35,273 $ 23,268 $ 28,092

See accompanying Notes to Consolidated Financial Statements.

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 TETRA TECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business

We are a leading provider of consulting and engineering services that focuses on water,
environment, infrastructure, resource management, energy, and international development. We are a
global company that is renowned for our expertise in providing water-related services for public and
private clients. We typically begin at the earliest stage of a project by identifying technical solutions and
developing execution plans tailored to our clients needs and resources. Our solutions may span the entire
life cycle of consulting and engineering projects and include applied science, data analysis, research,
engineering, design, construction management, and operations and maintenance.

In fiscal 2016, we managed our continuing operations under two reportable segments. We report
our water resources, water and wastewater treatment, environment, and infrastructure engineering
activities in the Water, Environment and Infrastructure (WEI) reportable segment. Our Resource
Management and Energy (RME) reportable segment includes our oil and gas, energy, international
development, waste management, remediation, and utilities services. In addition, we report the results of
the wind-down of our non-core construction activities in the Remediation and Construction Management
(RCM) reportable segment.

2. Basis of Presentation and Preparation

Principles of Consolidation and Presentation. The consolidated financial statements include our
accounts and those of joint ventures of which we are the primary beneficiary. All significant intercompany
balances and transactions have been eliminated in consolidation. Certain prior year amounts have been
revised to conform to the current year presentation.

Fiscal Year. We report results of operations based on 52 or 53-week periods ending on the Sunday
nearest September 30. Fiscal years 2016, 2015 and 2014 contained 53, 52 and 52 weeks, respectively.

Use of Estimates. The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America (U.S. GAAP) requires us to make estimates and
assumptions. These estimates and assumptions affect the amounts reported in our consolidated financial
statements and accompanying notes. Although such estimates and assumptions are based on
managements best knowledge of current events and actions we may take in the future, actual results could
differ materially from those estimates.

Revenue Recognition and Contract Costs. We recognize revenue for most of our contracts using the
percentage-of-completion method, primarily based on contract costs incurred to date compared to total
estimated contract costs. We generally utilize the cost-to-cost approach to estimate the progress towards
completion in order to determine the amount of revenue and profit to recognize. Revenue and cost
estimates for each significant contract are reviewed and reassessed quarterly. Changes in those estimates
could result in recognition of cumulative catch-up adjustments to the contracts inception-to-date revenue,
costs, and profit in the period in which such changes are made. Changes in revenue and cost estimates
could also result in a projected loss that would be recorded immediately in earnings. For fiscal years 2016,
2015 and 2014, we recognized net unfavorable operating income adjustments of $2.3 million, $8.9 million
and $35.9 million, respectively, due to changes in estimates. As of October 2, 2016 and September 27, 2015,
we recorded a liability for anticipated losses of $6.7 million and $10.5 million, respectively. The estimated
cost to complete the related contracts as of October 2, 2016 was $23.6 million.

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 TETRA TECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Basis of Presentation and Preparation (Continued)

Certain of our contracts are service-related contracts, such as providing operations and
maintenance services or a variety of technical assistance services. Our service contracts are accounted for
using the proportional performance method under which revenue is recognized in proportion to the
number of service activities performed, in proportion to the direct costs of performing the service activities,
or evenly across the period of performance depending upon the nature of the services provided.

We recognize revenue for work performed under three major types of contracts: fixed-price,
time-and-materials and cost-plus.

Fixed-Price. We enter into two major types of fixed-price contracts: firm fixed-price (FFP) and
fixed-price per unit (FPPU). Under FFP contracts, our clients pay us an agreed fixed-amount negotiated
in advance for a specified scope of work. We generally recognize revenue on FFP contracts using the
percentage-of-completion method. If the nature or circumstances of the contract prevent us from
preparing a reliable estimate at completion, we will delay profit recognition until adequate information
about the contracts progress becomes available. Under our FPPU contracts, clients pay us a set fee for
each service or production transaction that we complete. Accordingly, we recognize revenue under FPPU
contracts as we complete the related service or production transactions, generally using the proportional
performance method.

Time-and-Materials. Under time-and-materials contracts, we negotiate hourly billing rates and

charge our clients based on the actual time that we spend on a project. In addition, clients reimburse us for
our actual out-of-pocket costs for materials and other direct incidental expenditures that we incur in
connection with our performance under the contract. The majority of our time-and-material contracts are
subject to maximum contract values and, accordingly, revenue under these contracts is generally
recognized under the percentage-of-completion method. However, time and materials contracts that are
service-related contracts are accounted for utilizing the proportional performance method. Revenue on
contracts that are not subject to maximum contract values is recognized based on the actual number of
hours we spend on the projects plus any actual out-of-pocket costs of materials and other direct incidental
expenditures that we incur on the projects. Our time-and-materials contracts also generally include annual
billing rate adjustment provisions.

Cost-Plus. Under cost-plus contracts, we are reimbursed for allowable or otherwise defined costs
incurred plus a negotiated fee. The contracts may also include incentives for various performance criteria,
including quality, timeliness, ingenuity, safety and cost-effectiveness. In addition, our costs are generally
subject to review by our clients and regulatory audit agencies, and such reviews could result in costs being
disputed as non-reimbursable under the terms of the contract. Revenue for cost-plus contracts is
recognized at the time services are performed. Revenue is not recognized for non-recoverable costs.
Performance incentives are included in our estimates of revenue when their realization is reasonably
assured.

If estimated total costs on any contract indicate a loss, we recognize the entire estimated loss in
the period the loss becomes known. The cumulative effect of revisions to revenue, estimated costs to
complete contracts, including penalties, incentive awards, change orders, claims, liquidated damages,
anticipated losses, and other revisions are recorded in the period in which the revisions are identified and
the loss can be reasonably estimated. Such revisions could occur in any reporting period and the effects
may be material depending on the size of the project or the adjustment.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Basis of Presentation and Preparation (Continued)

Once contract performance is underway, we may experience changes in conditions, client

requirements, specifications, designs, materials, and expectations regarding the period of performance.
Such changes are change orders and may be initiated by us or by our clients. In many cases, agreement
with the client as to the terms of change orders is reached prior to work commencing; however, sometimes
circumstances require that work progress without obtaining client agreement. Revenue related to change
orders is recognized as costs are incurred. Change orders that are unapproved as to both price and scope
are evaluated as claims.

Claims are amounts in excess of agreed contract prices that we seek to collect from our clients or
other third parties for delays, errors in specifications and designs, contract terminations, change orders in
dispute or unapproved as to both scope and price, or other causes of unanticipated additional costs.
Revenue on claims is recognized only to the extent that contract costs related to the claims have been
incurred and when it is probable that the claim will result in a bona fide addition to contract value that can
be reliably estimated. No profit is recognized on a claim until final settlement occurs. This can lead to a
situation in which costs are recognized in one period and revenue is recognized in a subsequent period
when a client agreement is obtained or a claims resolution occurs.

Cash and Cash Equivalents. Cash and cash equivalents include all highly liquid investments with
maturities of 90 days or less at the date of purchase. Restricted cash of $2.5 million was included in
Prepaid expenses and other current assets on the consolidated balance sheet at fiscal 2016 year-end. For
cash held by our consolidated joint ventures, see Note 17, Joint Ventures.

Insurance Matters, Litigation and Contingencies. In the normal course of business, we are subject to
certain contractual guarantees and litigation. In addition, we maintain insurance coverage for various
aspects of our business and operations. We record in our consolidated balance sheets amounts
representing our estimated liability for these legal and insurance obligations. We include any adjustments
to these liabilities in our consolidated results of operations.

Accounts Receivable Net. Net accounts receivable is primarily comprised of billed and unbilled
accounts receivable, contract retentions and allowances for doubtful accounts. Billed accounts receivable
represent amounts billed to clients that have not been collected. Unbilled accounts receivable represent
revenue recognized but not yet billed pursuant to contract terms or billed after the period end date. Most
of our unbilled receivables at October 2, 2016 are expected to be billed and collected within 12 months.
Unbilled accounts receivable also include amounts related to requests for equitable adjustment to
contracts that provide for price redetermination. These amounts are recorded only when they can be
reliably estimated and realization is probable. Contract retentions represent amounts withheld by clients
until certain conditions are met or the project is completed, which may be several months or years.
Allowances for doubtful accounts represent the amounts that may become uncollectible or unrealizable in
the future. We determine an estimated allowance for uncollectible accounts based on managements
consideration of trends in the actual and forecasted credit quality of our clients, including delinquency and
payment history; type of client, such as a government agency or a commercial sector client; and general
economic and particular industry conditions that may affect a clients ability to pay. Billings in excess of
costs on uncompleted contracts represent the amount of cash collected from clients and billings to clients
on contracts in advance of work performed and revenue recognized. The majority of these amounts will be
earned within 12 months.

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 TETRA TECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Basis of Presentation and Preparation (Continued)

Property and Equipment. Property and equipment are recorded at cost and are depreciated over
their estimated useful lives using the straight-line method. When property and equipment are retired or
otherwise disposed of, the cost and accumulated depreciation are removed from our consolidated balance
sheets and any resulting gain or loss is reflected in our consolidated statements of income. Expenditures
for maintenance and repairs are expensed as incurred. Generally, estimated useful lives range from three
to ten years for equipment, furniture and fixtures. Buildings are depreciated over periods not exceeding
40 years. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated
useful lives or the length of the lease.

Long-Lived Assets. Our policy regarding long-lived assets is to evaluate the recoverability of our
assets when the facts and circumstances suggest that the assets may be impaired. This assessment is
performed based on the estimated undiscounted cash flows compared to the carrying value of the assets. If
the future cash flows (undiscounted and without interest charges) are less than the carrying value, a
write-down would be recorded to reduce the related asset to its estimated fair value.

We recognize a liability for contract termination costs associated with an exit activity for costs that
will continue to be incurred under a lease for its remaining term without economic benefit to us, initially
measured at its fair value at the cease-use date. The fair value is determined based on the remaining lease
rentals, adjusted for the effects of any prepaid or deferred items recognized under the lease, and reduced
by estimated sublease rentals.

Business Combinations. The cost of an acquired company is assigned to the tangible and intangible
assets purchased and the liabilities assumed on the basis of their fair values at the date of acquisition. The
determination of fair values of assets and liabilities acquired requires us to make estimates and use
valuation techniques when a market value is not readily available. Any excess of purchase price over the
fair value of net tangible and intangible assets acquired is allocated to goodwill. Goodwill typically
represents the value paid for the assembled workforce and enhancement of our service offerings.
Transaction costs associated with business combinations are expensed as they are incurred.

Goodwill and Intangible Assets. Goodwill represents the excess of the aggregate purchase price over
the fair value of the net assets acquired in a business acquisition. Following an acquisition, we perform an
analysis to value the acquired companys tangible and identifiable intangible assets and liabilities. With
respect to identifiable intangible assets, we consider backlog, non-compete agreements, client relations,
trade names, patents and other assets. We amortize our intangible assets based on the period over which
the contractual or economic benefits of the intangible assets are expected to be realized. We assess the
recoverability of the unamortized balance of our intangible assets when indicators of impairment are
present based on expected future profitability and undiscounted expected cash flows and their contribution
to our overall operations. Should the review indicate that the carrying value is not fully recoverable, the
excess of the carrying value over the fair value of the intangible assets would be recognized as an
impairment loss.

We test our goodwill for impairment on an annual basis, and more frequently when an event
occurs or circumstances indicate that the carrying value of the asset may not be recoverable. We believe the
methodology that we use to review impairment of goodwill, which includes a significant amount of
judgment and estimates, provides us with a reasonable basis to determine whether impairment has
occurred. However, many of the factors employed in determining whether our goodwill is impaired are

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 TETRA TECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Basis of Presentation and Preparation (Continued)

outside of our control and it is reasonably likely that assumptions and estimates will change in future
periods. These changes could result in future impairments.

We perform our annual goodwill impairment review at the beginning of our fiscal fourth quarter.
Our last annual review was performed at June 27, 2016 (i.e., the first day of our fiscal fourth quarter). In
addition, we regularly evaluate whether events and circumstances have occurred that may indicate a
potential change in recoverability of goodwill. We perform interim goodwill impairment reviews between
our annual reviews if certain events and circumstances have occurred, including a deterioration in general
economic conditions, an increased competitive environment, a change in management, key personnel,
strategy or customers, negative or declining cash flows, or a decline in actual or planned revenue or
earnings compared with actual and projected results of relevant prior periods (See Note 6, Goodwill and
Intangible Assets for further discussion). We assess goodwill for impairment at the reporting unit level,
which is defined as an operating segment or one level below an operating segment, referred to as a
component. Our operating segments are the same as our reportable segments and our reporting units for
goodwill impairment testing are the components one level below our reportable segments. These
components constitute a business for which discrete financial information is available and where segment
management regularly reviews the operating results of that component. We aggregate components within
an operating segment that have similar economic characteristics.

The impairment test for goodwill is a two-step process involving the comparison of the estimated
fair value of each reporting unit to the reporting units carrying value, including goodwill. We estimate the
fair value of reporting units based on a comparison and weighting of the income approach, specifically the
discounted cash flow method and the market approach, which estimates the fair value of our reporting
units based upon comparable market prices and recent transactions and also validates the reasonableness
of the multiples from the income approach. If the fair value of a reporting unit exceeds its carrying
amount, the goodwill of the reporting unit is not considered impaired; therefore, the second step of the
impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, we
perform the second step of the goodwill impairment test to measure the amount of impairment loss to be
recorded. If our goodwill is impaired, we are required to record a non-cash charge that could have a
material adverse effect on our consolidated financial statements.

Contingent Consideration. Most of our acquisition agreements include contingent earn-out

arrangements, which are generally based on the achievement of future operating income thresholds. The
contingent earn-out arrangements are based upon our valuations of the acquired companies and reduce
the risk of overpaying for acquisitions if the projected financial results are not achieved.

The fair values of these earn-out arrangements are included as part of the purchase price of the
acquired companies on their respective acquisition dates. For each transaction, we estimate the fair value
of contingent earn-out payments as part of the initial purchase price and record the estimated fair value of
contingent consideration as a liability in Current contingent earn-out liabilities and Long-term
contingent earn-out liabilities on the consolidated balance sheets. We consider several factors when
determining that contingent earn-out liabilities are part of the purchase price, including the following:
(1) the valuation of our acquisitions is not supported solely by the initial consideration paid, and the
contingent earn-out formula is a critical and material component of the valuation approach to determining
the purchase price; and (2) the former owners of acquired companies that remain as key employees receive
compensation other than contingent earn-out payments at a reasonable level compared with the

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 TETRA TECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Basis of Presentation and Preparation (Continued)

compensation of our other key employees. The contingent earn-out payments are not affected by
employment termination.

We measure our contingent earn-out liabilities at fair value on a recurring basis using significant
unobservable inputs classified within Level 3 of the fair value hierarchy. We use a probability weighted
discounted income approach as a valuation technique to convert future estimated cash flows to a single
present value amount. The significant unobservable inputs used in the fair value measurements are
operating income projections over the earn-out period (generally two or three years), and the probability
outcome percentages we assign to each scenario. Significant increases or decreases to either of these inputs
in isolation would result in a significantly higher or lower liability with a higher liability capped by the
contractual maximum of the contingent earn-out obligation. Ultimately, the liability will be equivalent to
the amount paid, and the difference between the fair value estimate and amount paid will be recorded in
earnings. The amount paid that is less than or equal to the liability on the acquisition date is reflected as
cash used in financing activities in our consolidated statements of cash flows. Any amount paid in excess of
the liability on the acquisition date is reflected as cash used in operating activities.

We review and re-assess the estimated fair value of contingent consideration on a quarterly basis,
and the updated fair value could differ materially from the initial estimates. Changes in the estimated fair
value of our contingent earn-out liabilities related to the time component of the present value calculation
are reported in interest expense. Adjustments to the estimated fair value related to changes in all other
unobservable inputs are reported in operating income.

Fair Value of Financial Instruments. We determine the fair values of our financial instruments,
including short-term investments, debt instruments and derivative instruments based on inputs or
assumptions that market participants would use in pricing an asset or a liability. We categorize our
instruments using a valuation hierarchy for disclosure of the inputs used to measure fair value. This
hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices
(unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar
assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly
or indirectly through market corroboration, for substantially the full term of the financial instrument; and
Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities
at fair value. The classification of a financial asset or liability within the hierarchy is determined based on
the lowest level input that is significant to the fair value measurement.

The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable
approximate fair values based on their short-term nature. The carrying amounts of our revolving credit
facility approximates fair value because the interest rates are based upon variable reference rates (see
Note 9, Long-Term Debt and Note 14, Derivative Financial Instruments for additional disclosure).
Certain other assets and liabilities, such as contingent earn-out liabilities, assets held for sale and amounts
related to cash-flow hedges, are required to be carried in our consolidated financial statements at fair
value.

Our fair value measurement methods may produce a fair value calculation that may not be
indicative of net realizable value or reflective of future fair values. Although we believe our valuation
methods are appropriate and consistent with those used by other market participants, the use of different

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2. Basis of Presentation and Preparation (Continued)

methodologies or assumptions to determine fair value could result in a different fair value measurement at
the reporting date.

Derivative Financial Instruments. We account for our derivative instruments as either assets or
liabilities and carry them at fair value. For derivative instruments that hedge the exposure to variability in
expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss
on the derivative instrument is reported as a component of accumulated other comprehensive income
(loss) in stockholders equity and reclassified into income in the same period or periods during which the
hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative
instrument, if any, is recognized in current income. To receive hedge accounting treatment, cash flow
hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions.

The net gain or loss on the effective portion of a derivative instrument that is designated as an
economic hedge of the foreign currency translation exposure generated by the re-measurement of certain
assets and liabilities denominated in a non-functional currency in a foreign operation is reported in the
same manner as a foreign currency translation adjustment. Accordingly, any gains or losses related to these
derivative instruments are recognized in current income. Derivatives that do not qualify as hedges are
adjusted to fair value through current income.

Deferred Compensation. We maintain a non-qualified defined contribution supplemental

retirement plan for certain key employees and non-employee directors that is accounted for in accordance
with applicable authoritative guidance on accounting for deferred compensation arrangements where
amounts earned are held in a rabbi trust and invested. Employee deferrals and our match are deposited
into a rabbi trust, and the funds are generally invested in individual variable life insurance contracts that
we own and are specifically designed to informally fund savings plans of this nature. Our consolidated
balance sheets reflect our investment in variable life insurance contracts in Other long-term assets. Our
obligation to participating employees is reflected in Other long-term liabilities. All income and expenses
related to the rabbi trust are reflected in our consolidated statements of income.

Income Taxes. We file a consolidated U.S. federal income tax return and a combined California
franchise tax return. In addition, we file other returns that are required in the states, foreign jurisdictions
and other jurisdictions in which we do business. We account for certain income and expense items
differently for financial reporting and income tax purposes. Deferred tax assets and liabilities are
computed for the difference between the financial statement and tax bases of assets and liabilities that will
result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the
periods in which the differences are expected to reverse. In determining the need for a valuation
allowance, management reviews both positive and negative evidence, including current and historical
results of operations, future income projections and potential tax planning strategies. Based on our
assessment, we have concluded that a portion of the deferred tax assets at October 2, 2016 will not be
realized.

According to the authoritative guidance on accounting for uncertainty in income taxes, we may
recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax
position will be sustained on examination by the taxing authorities based on the technical merits of the
position. The tax benefits recognized in the financial statements from such a position should be measured
based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate

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2. Basis of Presentation and Preparation (Continued)

settlement. This guidance also addresses de-recognition, classification, interest and penalties on income
taxes, accounting in interim periods and disclosure requirements for uncertain tax positions.

Concentration of Credit Risk. Financial instruments that subject us to credit risk consist primarily of
cash and cash equivalents and net accounts receivable. In the event that we have surplus cash, we place our
temporary cash investments with lower risk financial institutions and, by policy, limit the amount of
investment exposure to any one financial institution. Approximately 22% of accounts receivable were due
from various agencies of the U.S. federal government at fiscal 2016 year-end. The remaining accounts
receivable are generally diversified due to the large number of organizations comprising our client base
and their geographic dispersion. We perform ongoing credit evaluations of our clients and maintain an
allowance for potential credit losses. Approximately 42.4%, 29.5% and 28.1% of our fiscal 2016 revenue
was generated from our U.S government, U.S. commercial and international clients, respectively (see
Note 19, Reportable Segments for more information).

Foreign Currency Translation. We determine the functional currency of our foreign operating units
based upon the primary currency in which they operate. These operating units maintain their accounting
records in their local currency, primarily Canadian and Australian dollars. Where the functional currency is
not the U.S. dollar, translation of assets and liabilities to U.S. dollars is based on exchange rates at the
balance sheet date. Translation of revenue and expenses to U.S. dollars is based on the average rate during
the period. Translation gains or losses are reported as a component of other comprehensive income (loss).
Gains or losses from foreign currency transactions are included in results of operations, with the exception
of intercompany foreign transactions that are considered long-term investments, which are recorded in
Accumulated other comprehensive income (loss) on the consolidated balance sheets.

Recently Adopted and Pending Accounting Guidance. In November 2015, the Financial Accounting
Standards Board (FASB) issued updated guidance as a part of its ongoing Simplification Initiative, with
the objective of reducing complexity in accounting standards. The updated guidance requires that all
deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on
the balance sheet. This guidance does not change the offsetting requirements for deferred tax liabilities
and assets, which results in the presentation of one amount on the balance sheet. We adopted this guidance
prospectively as of October 2, 2016, and our consolidated balance sheet reflects the new guidance for
classification of deferred taxes.

In February 2015, the FASB issued updated guidance which changes the analysis that a reporting
entity must perform to determine whether it should consolidate certain types of legal entities. The updated
guidance is effective for interim and annual reporting periods in years beginning after December 15, 2015,
with early adoption permitted. We adopted this guidance, which did not have an impact on our
consolidated financial statements.

In April 2015, the FASB issued updated guidance intended to simplify, and provide consistency to,
the presentation of debt issuance costs. The new standard requires that debt issuance costs be presented in
the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt
discounts. The updated guidance is effective for interim and annual reporting periods in years beginning
after December 15, 2015, with early adoption permitted. We adopted this guidance, which did not have a
material impact on our consolidated financial statements. We had $2.6 million of unamortized debt
issuance costs at October 2, 2016.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Basis of Presentation and Preparation (Continued)

In August 2015, the FASB issued updated guidance relating to the SEC Staff Announcement at
the June 18, 2015 Emerging Issues Task Force meeting on the presentation and subsequent measurement
of debt issuance costs associated with line-of-credit arrangements. The updated guidance allows for the
deferral and presentation of debt issuance costs as an asset which may be amortized ratably over the term
of the line-of-credit arrangement, regardless of whether there are any related outstanding borrowings. The
updated guidance is effective for interim and annual reporting periods in years beginning after
December 15, 2015, with early adoption permitted. We adopted this guidance, which did not have a
material impact on our consolidated financial statements.

In September 2015, the FASB issued updated guidance to simplify measurement-period

adjustments in business combinations. The updated guidance eliminated the requirement that an acquirer
in a business combination account for measurement-period adjustments retrospectively. Instead, an
acquirer will recognize a measurement-period adjustment during the period in which it determines the
amount of the adjustment. The updated guidance was effective for interim and annual reporting periods
beginning after December 15, 2015, with early adoption permitted. We adopted this guidance, which did
not have a material impact on our consolidated financial statements.

In May 2014, the FASB issued an accounting standard that will supersede existing revenue
recognition guidance under current U.S. GAAP. The new standard is a comprehensive new revenue
recognition model that requires a company to recognize revenue to depict the transfer of goods or services
to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods
and services. The accounting standard is effective for us in the first quarter of fiscal 2019. Companies may
use either a full retrospective or a modified retrospective approach to adopt this standard. We are
currently evaluating the impact and method of the adoption of this guidance on our consolidated financial
statements.

In January 2015, the FASB issued an amendment to the accounting guidance related to the income
statement presentation of extraordinary and unusual items. The amendment eliminates from U.S. GAAP
the concept of extraordinary items. The guidance is effective for us in the first quarter of fiscal 2017. We do
not expect the adoption of this guidance to have an impact on our consolidated financial statements.

In January 2016, the FASB issued guidance that generally requires companies to measure
investments in other entities, except those accounted for under the equity method, at fair value and
recognize any changes in fair value in net income. The guidance is effective for annual and interim
reporting periods beginning after December 15, 2017. We do not expect the adoption of this guidance to
have a significant impact on our consolidated financial statements.

In February 2016, the FASB issued guidance that primarily requires lessees to recognize most
leases on their balance sheets but record expenses on their income statements in a manner similar to
current accounting. For lessors, the guidance modifies the classification criteria and the accounting for
sales-type and direct financing leases. The guidance is effective for annual and interim periods beginning
after December 15, 2018, with early adoption permitted. We are currently evaluating the impact that this
guidance will have on our consolidated financial statements.

In March 2016, the FASB issued updated guidance which requires excess tax benefits and
deficiencies on share-based payments to be recorded as income tax expense or benefit in the income

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2. Basis of Presentation and Preparation (Continued)

statement rather than being recorded in additional paid-in capital. This guidance is effective for annual
and interim periods beginning after December 15, 2016, with early adoption permitted. We do not expect
the adoption of this guidance to have a material impact on our consolidated financial statements.

In June 2016, the FASB issued updated guidance which requires entities to estimate all expected
credit losses for certain types of financial instruments, including trade receivables, held at the reporting
date based on historical experience, current conditions, and reasonable and supportable forecasts. The
updated guidance also expands the disclosure requirements to enable users of financial statements to
understand the entitys assumptions, models and methods for estimating expected credit losses. This
guidance is effective for annual and interim periods beginning after December 15, 2019, with early
adoption permitted. We are currently evaluating the impact that this guidance will have on our
consolidated financial statements.

In August 2016, the FASB issued guidance to address eight specific cash flow issues to reduce the
existing diversity in practice in how certain cash receipts and cash payments are presented and classified in
the statement of cash flows. This guidance is effective for annual and interim periods beginning after
December 15, 2017, with early adoption permitted. We are currently evaluating the impact that this
guidance will have on our consolidated financial statements.

In October 2016, the FASB issued updated guidance which requires entities to recognize the
income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer
occurs. The updated guidance also requires entities to disclose a comparison of income tax expense or
benefit with statutory expectations and disclose the types of temporary differences and carryforwards that
give rise to a significant portion of deferred income taxes. This guidance is effective for annual and interim
periods beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the
impact that this guidance will have on our consolidated financial statements.

3. Stock Repurchase and Dividends

On November 10, 2014, the Board of Directors authorized a stock repurchase program under
which we could repurchase up to $200 million of our common stock over the succeeding two years. In fiscal
2016, we repurchased through open market purchases under this program a total of 3,468,062 shares at an
average price of $28.69, for a total cost of $99.5 million.

On November 9, 2015, the Board of Directors declared a quarterly cash dividend of $0.08 per
share payable on December 11, 2015 to stockholders of record as of the close of business on November 30,
2015. On January 25, 2016, the Board of Directors declared a quarterly cash dividend of $0.08 per share
payable on February 26, 2016 to stockholders of record as of the close of business on February 12, 2016.
On April 25, 2016, the Board of Directors declared a quarterly cash dividend of $0.09 per share payable on
May 27, 2016 to stockholders of record as of the close of business on May 13, 2016. On July 25, 2016, the
Board of Directors declared a quarterly cash dividend of $0.09 per share payable on August 31, 2016 to
stockholders of record as of the close of business on August 12, 2016. Dividends totaling $19.7 million and
$18.2 million were paid in fiscal 2016 and fiscal 2015, respectively.

Subsequent Events. On November 7, 2016, the Board of Directors declared a quarterly cash
dividend of $0.09 per share payable on December 14, 2016 to stockholders of record as of the close of
business on December 1, 2016. The Board also authorized a new stock repurchase program under which
we could repurchase up to $200 million of our common stock.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4. Accounts Receivable Net and Revenue Recognition

Net accounts receivable and billings in excess of costs on uncompleted contracts consisted of the
following at October 2, 2016 and September 27, 2015:

October 2, September 27,

2016 2015
(in thousands)

Billed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 364,287 $ 331,364

Unbilled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356,147 311,823
Contract retentions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,135 24,333
Total accounts receivable gross . . . . . . . . . . . . . . . . . . . . 749,569 667,520
Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . (35,233) (31,490)
Total accounts receivable net . . . . . . . . . . . . . . . . . . . . . $ 714,336 $ 636,030

Billings in excess of costs on uncompleted contracts . . . . . . . . $ 88,223 $ 93,989

Billed accounts receivable represent amounts billed to clients that have not been collected.
Unbilled accounts receivable represent revenue recognized but not yet billed pursuant to contract terms or
billed after the period end date. Except for amounts related to claims as discussed below, most of our
unbilled receivables at October 2, 2016 are expected to be billed and collected within 12 months. Contract
retentions represent amounts withheld by clients until certain conditions are met or the project is
completed, which may be several months or years. The allowance for doubtful accounts represents
amounts that are expected to become uncollectible or unrealizable in the future. We determine an
estimated allowance for uncollectible accounts based on managements consideration of trends in the
actual and forecasted credit quality of our clients, including delinquency and payment history; type of
client, such as a government agency or a commercial sector client; and general economic and particular
industry conditions that may affect a clients ability to pay. Billings in excess of costs on uncompleted
contracts represent the amount of cash collected from clients and billings to clients on contracts in advance
of revenue recognized. The majority of billings in excess of costs on uncompleted contracts will be earned
within 12 months.

Once contract performance is underway, we may experience changes in conditions, client

requirements, specifications, designs, materials and expectations regarding the period of performance.
Such changes result in change orders and may be initiated by us or by our clients. In many cases,
agreement with the client as to the terms of change orders is reached prior to work commencing; however,
sometimes circumstances require that work progress without a definitive client agreement. Unapproved
change orders constitute claims in excess of agreed contract prices that we seek to collect from our clients
(or other third parties) for delays, errors in specifications and designs, contract terminations, or other
causes of unanticipated additional costs. Revenue on claims is recognized when contract costs related to
claims have been incurred and when their addition to contract value can be reliably estimated. This can
lead to a situation in which costs are recognized in one period and revenue is recognized in a subsequent
period, such as when client agreement is obtained or a claims resolution occurs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4. Accounts Receivable Net and Revenue Recognition (Continued)

Total accounts receivable at October 2, 2016 and September 27, 2015 included $45 million and
$53 million, respectively, related to claims, including requests for equitable adjustment, on contracts that
provide for price redetermination. During fiscal 2016, we collected $13.4 million to settle claims of
$8.8 million, which resulted in gains in operating income of $4.6 million in the RCM reportable segment.
We regularly evaluate all unsettled claim amounts and record appropriate adjustments to operating
earnings when it is probable that the claim will result in a different contract value than the amount
previously estimated. In fiscal 2016, we also recognized reductions to operating income in our RCM
segment and a related increase in the allowance for doubtful accounts of $7.9 million as a result of our
updated assessment of the collectability of certain accounts receivable, of which $4.6 million related to
unsettled claims. In fiscal 2015, we settled two claims related to completed transportation projects in the
RCM segment totaling $31 million for cash proceeds of $29 million and, as a result, recognized reduced
revenue and operating income of $2.0 million.

Billed accounts receivable related to U.S. federal government contracts were $47.4 million and
$61.9 million at October 2, 2016 and September 27, 2015, respectively. U.S. federal government unbilled
receivables were $92.2 million and $74.2 million at October 2, 2016 and September 27, 2015, respectively.
Other than the U.S. federal government, no single client accounted for more than 10% of our accounts
receivable at October 2, 2016 and September 27, 2015.

5. Mergers and Acquisitions

In fiscal 2014, we made immaterial acquisitions that enhanced our service offerings and expanded
our geographic presence in our WEI and RME segments.

In fiscal 2015, we acquired Cornerstone Environmental Group, LLC (CEG), headquartered in

Middletown, New York. CEG is an environmental engineering and consulting firm focused on solid waste
markets in the United States, and is included in our RME segment. The fair value of the purchase price for
CEG was $15.9 million. Of this amount, $11.8 million was paid to the former owners and $4.1 million was
the estimated fair value of contingent earn-out obligations, with a maximum of $9.8 million, based upon
the achievement of specified financial objectives. The results of this acquisition were included in the
consolidated financial statements from the closing date. The acquisition was not considered material to our
consolidated financial statements. As a result, no pro forma information has been provided.

On January 18, 2016, we acquired control of Coffey International Limited (Coffey),

headquartered in Sydney, Australia. Coffey had approximately 3,300 staff delivering technical and
engineering solutions in international development and geoscience. Coffey significantly expands our
geographic presence, particularly in Australia and Asia Pacific, and is part of our RME segment. In
addition to Australia, Coffeys international development business has operations supporting federal
government agencies in the U.S. and the United Kingdom. The fair value of the purchase price for Coffey
was $76.1 million, in addition to $65.1 million of assumed debt, which consisted of secured bank term debt
of $37.1 million and unsecured corporate bond obligations of $28.0 million. All of this debt was paid in full
in the second quarter of fiscal 2016 subsequent to the acquisition.

In the second quarter of fiscal 2016, we also acquired INDUS Corporation (INDUS),
headquartered in Vienna, Virginia. INDUS is an information technology solutions firm focused on water
data analytics, geospatial analysis, secure infrastructure, and software applications management for U.S.

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5. Mergers and Acquisitions (Continued)

federal government customers, and is included in our WEI segment. The fair value of the purchase price
for INDUS was $18.7 million. Of this amount, $14.0 million was paid to the sellers and $4.7 million was the
estimated fair value of contingent earn-out obligations, with a maximum of $8.0 million, based upon the
achievement of specified operating income targets in each of the two years following the acquisition.

The following table summarizes the estimated fair values of assets acquired and liabilities assumed
as of the respective acquisition dates for our acquisitions completed in fiscal 2016 (in thousands):

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 71,515

Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,869
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,218
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107,618
Backlog and trade name intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,445
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 747
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (77,606)
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (65,086)
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,885)
Net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 94,835

Goodwill additions resulting from the above business combinations are primarily attributable to
the existing workforce of the acquired companies and the synergies expected to arise after the acquisitions.
Specifically, goodwill additions related to the fiscal 2016 acquisitions primarily represent the value of
workforces with distinct expertise in the international development, geoscience, and software applications
management markets. The goodwill addition related to the fiscal 2015 acquisition primarily represents the
value of the workforce with distinct expertise in the solid waste market. In addition, these acquired
capabilities, when combined with our existing global consulting and engineering business, result in
opportunities that allow us to provide services under contracts that could not have been pursued
individually by either us or the acquired companies. The results of these acquisitions were included in the
consolidated financial statements from their respective closing dates.

Backlog and trade name intangible assets include the fair value of existing contracts and the
underlying customer relationships with lives ranging from 1 to 5 years (weighted average of approximately
3 years) and the fair value of trade names with lives ranging from 3 to 5 years. The purchase price
allocation is preliminary and subject to adjustment based upon the final determination of the net assets
acquired and information necessary to perform the final valuation. We have not yet completed our final
assessment of the fair values of purchased receivables, intangible assets, tax balances, contingent liabilities
or acquired contracts. The final purchase price allocations may result in adjustments to certain assets and
liabilities, including the residual amount allocated to goodwill. Goodwill recognized largely results from a
substantial and technically qualified assembled workforce, which does not qualify for separate recognition,
as well as expected future synergies from combining operations.

The table below presents summarized unaudited consolidated pro forma operating results
including the related acquisition, integration and debt pre-payment charges, assuming we had acquired
Coffey and INDUS at the beginning of fiscal 2015. These pro-forma operating results are presented for

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5. Mergers and Acquisitions (Continued)

illustrative purposes only and are not indicative of the operating results that would have been achieved had
the related events occurred at the beginning of fiscal 2015.

Pro-Forma
Fiscal Year Ended
October 2, September 27,
2016 2015
(in thousands, except per share data)

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,714,658 $ 2,749,653

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . 152,676 73,209
Net income attributable to Tetra Tech . . . . . . . . . . . . 98,871 20,689
Earnings per share attributable to Tetra Tech
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.70 $ 0.33
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.68 $ 0.33

Since their respective acquisition dates, Coffey and INDUS combined contributed $320.6 million
in revenue and $13.6 million in operating income for fiscal 2016. Amortization of intangible assets since
their respective acquisition dates was $6.7 million for 2016.

Acquisition and integration expenses in the accompanying consolidated statements of income are
comprised of the following:

Fiscal Year Ended

October 2, 2016
(in thousands)

Severance including change in control payments . . . . . . . . . . . . . . . . . . . $ 10,917

Professional services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,685
Real estate-related . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,946
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 19,548

As of October 2, 2016, all of the acquisition and integration expenses incurred to date have been
paid. All acquisition and integration expenses are included in our Corporate reportable segment, as
presented in Note 19. In addition, in the second quarter of fiscal 2016, we repaid Coffeys bank loans and
corporate bonds in full, including $1.9 million in pre-payment charges that are included in interest expense.

Most of our acquisition agreements include contingent earn-out agreements, which are generally
based on the achievement of future operating income thresholds. The contingent earn-out arrangements
are based on our valuations of the acquired companies, and reduce the risk of overpaying for acquisitions if
the projected financial results are not achieved. The fair values of any earn-out arrangements are included
as part of the purchase price of the acquired companies on their respective acquisition dates. For each
transaction, we estimate the fair value of contingent earn-out payments as part of the initial purchase price
and record the estimated fair value of contingent consideration as a liability in Current contingent
earn-out liabilities and Long-term contingent earn-out liabilities on the consolidated balance sheets.
We consider several factors when determining that contingent earn-out liabilities are part of the purchase

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5. Mergers and Acquisitions (Continued)

price, including the following: (1) the valuation of our acquisitions is not supported solely by the initial
consideration paid, and the contingent earn-out formula is a critical and material component of the
valuation approach to determining the purchase price; and (2) the former owners of acquired companies
that remain as key employees receive compensation other than contingent earn-out payments at a
reasonable level compared with the compensation of our other key employees. The contingent earn-out
payments are not affected by employment termination.

We measure our contingent earn-out liabilities at fair value on a recurring basis using significant
unobservable inputs classified within Level 3 of the fair value hierarchy. We use a probability-weighted
discounted income approach as a valuation technique to convert future estimated cash flows to a single
present value amount. The significant unobservable inputs used in the fair value measurements are
operating income projections over the earn-out period (generally two or three years), and the probability
outcome percentages we assign to each scenario. Significant increases or decreases to either of these inputs
in isolation would result in a significantly higher or lower liability, with a higher liability capped by the
contractual maximum of the contingent earn-out obligation. Ultimately, the liability will be equivalent to
the amount paid, and the difference between the fair value estimate and amount paid will be recorded in
earnings. The amount paid that is less than or equal to the contingent earn-out liability on the acquisition
date is reflected as cash used in financing activities in our consolidated statements of cash flows. Any
amount paid in excess of the contingent earn-out liability on the acquisition date is reflected as cash used
in operating activities.

We review and re-assess the estimated fair value of contingent consideration on a quarterly basis,
and the updated fair value could differ materially from the initial estimates. Changes in the estimated fair
value of our contingent earn-out liabilities related to the time component of the present value calculation
are reported in interest expense. Adjustments to the estimated fair value related to changes in all other
unobservable inputs are reported in operating income. During fiscal 2016, we increased our contingent
earn-out liabilities and reported related losses in operating income of $2.8 million. These losses include a
$1.8 million charge that reflected our updated valuation of the contingent consideration liability for CEG.
This valuation included our updated projection of CEGs financial performance during the earn-out
period, which exceeded our original estimate at the acquisition date. The remaining $1.0 million loss
represented the final cash settlement of an earn-out liability that was valued at $0 at the end of fiscal 2015.

During fiscal 2015, we decreased our contingent earn-out liabilities and reported a related gain in
operating income of $3.1 million. This gain resulted from an updated valuation of the contingent
consideration liability for Caber Engineering Inc. (Caber), which is part of our RME segment.

The acquisition agreement for Caber included a contingent earn-out agreement based on the
achievement of operating income thresholds (in Canadian dollars) in each of the first two years beginning
on the acquisition date, which was in the first quarter of fiscal 2014. The maximum earn-out obligation
over the two-year earn-out period was C$8.0 million (C$4.0 million in each year). These amounts could be
earned on a pro-rata basis for operating income within a predetermined range in each year. Caber was
required to meet a minimum operating income threshold in each year to earn any contingent
consideration. These thresholds were C$4.0 million and C$4.6 million in years one and two, respectively. In
order to earn the maximum contingent consideration, Caber needed to generate operating income of
C$4.4 million in year one and C$5.1 million in year two.

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5. Mergers and Acquisitions (Continued)

The determination of the fair value of the purchase price for Caber on the acquisition date
included our estimate of the fair value of the related contingent earn-out obligation. This initial valuation
was primarily based on probability-weighted internal estimates of Cabers operating income during each
earn-out period. As a result of these estimates, we calculated an initial fair value at the acquisition date of
Cabers contingent earn-out liability of C$6.5 million in the first quarter of fiscal 2014. In determining that
Caber would earn 81% of the maximum potential earn-out, we considered several factors including
Cabers recent historical revenue and operating income levels and growth rates. We also considered the
recent trend in Cabers backlog level and the prospects for the oil and gas industry in Western Canada.

Cabers actual financial performance in the first earn-out period exceeded our original estimate at
the acquisition date. As a result, in the fourth quarter of fiscal 2014, we increased the related contingent
consideration liability and recognized a loss of $1.0 million. This updated valuation included our
assumption that Caber would earn the maximum amount of contingent consideration of $4.0 million in the
first earn-out period. In the second quarter of fiscal 2015, we completed our final calculation of the
contingent consideration for the first earn-out period and paid contingent consideration of C$4.0 million
(USD$3.2 million). At that time we also evaluated our estimate of Cabers contingent consideration
liability for the second earn-out period. This assessment included a review of the status of ongoing projects
in Cabers backlog, and the inventory of prospective new contract awards. We also considered the status of
the oil and gas industry in Western Canada, particularly in light of the decline in oil prices at the time. As a
result of this assessment, we concluded that Cabers operating income in the second earn-out period would
be lower than our original estimate at the acquisition date and our subsequent estimates through the first
quarter of fiscal 2015. We also concluded that Cabers operating income for the second earn-out period
would be lower than the minimum requirement of C$4.6 million to earn any contingent consideration.
Accordingly, in the second quarter of fiscal 2015, we reduced the Caber contingent earn-out liability to $0,
which resulted in a gain of $3.1 million. The second earn-out period ended in the first quarter of fiscal 2016
with no further adjustments.

The fiscal 2014 net gains primarily resulted from updated valuations of the contingent
consideration liabilities for Parkland Pipeline (Parkland) and American Environmental Group (AEG),
which are both part of our RME segment.

The acquisition agreement for Parkland included a contingent earn-out agreement based on the
achievement of operating income thresholds (in Canadian dollars) in each of the first three years
beginning on the acquisition date, which was in the second quarter of fiscal 2013. The maximum earn-out
obligation over the three-year earn-out period was C$56.0 million (C$12.0 million, C$22.0 million and
C$22.0 million in earn-out years one, two and three, respectively). These amounts could be earned
primarily on a pro-rata basis for operating income within a predetermined range in each year. To a lesser
extent, additional earn-out consideration could be earned for operating income above the high-end of the
range up to the contractual maximum of C$56.0 million. Parkland was required to meet a minimum
operating income threshold in each year in order to earn any contingent consideration. These thresholds
were C$34.7 million, C$38.2 million and C$41.9 million in years one, two and three, respectively. In order
to earn the maximum contingent consideration, Parkland would need to generate operating income of
C$42.5 million in year one, C$46.4 million in year two, and C$50.6 million in year three.

The determination of the fair value of the purchase price for Parkland on the acquisition date
included our estimate of the fair value of the related contingent earn-out obligation. This initial valuation

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5. Mergers and Acquisitions (Continued)

was primarily based on probability-weighted internal estimates of Parklands operating income during each
earn-out period. As a result of these estimates, we calculated an initial fair value at the acquisition date of
Parklands contingent earn-out liability of C$46.8 million in the second quarter of fiscal 2013. In
determining that Parkland would attain 84% of the maximum potential earn-out, we considered several
factors including Parklands recent historical revenue and operating income levels and growth rates, the
recent trend in Parklands backlog, and the prospects for the midstream oil and gas industry in Western
Canada.

As discussed below, in fiscal 2014, we recorded decreases in our contingent earn-out liability for
Parkland and reported related net gains in operating income of $44.6 million. These gains resulted from
Parklands actual and projected post-acquisition performance falling below our initial expectations
concerning the likelihood and timing of achieving the relevant operating income thresholds. The remaining
difference compared to the initial value was due to currency translation, and the related liability was $0 at
the end of fiscal 2014.

In the second quarter of fiscal 2014, we updated the estimated cost to complete a large fixed-price
contract at Parkland, and determined that the project would be break-even compared to the significant
profit estimated the previous quarter when the project was initiated. As a result, during the second quarter
of fiscal 2014 we reversed $5.3 million of profit previously recognized on the project. This variance, and
our updated estimate that the revenue for the remainder of the project would produce no operating
income, resulted in our conclusion that Parklands operating income in the first and second earn-out
periods would fall below the minimum operating income thresholds in each such year. As a result, we
reduced the contingent earn-out liability for the first and second earn-out periods to $0, which resulted in
gains totaling $24.7 million ($5.6 million and $19.1 million in the first and second quarters of fiscal 2014,
respectively).

In the fourth quarter of fiscal 2014, we updated our projection of Parklands operating income for
the third earn-out period. This assessment included a review of the projects in Parklands backlog, the
inventory of prospective new contract awards, and the forecast for economic activity in the Western
Canada oil and gas sector. As a result of this assessment, we concluded that Parklands operating income in
the third earn-out period would be lower than our original estimate at the acquisition date and would fall
below the minimum operating income threshold. As a result, we reduced the remaining contingent
earn-out liability balance for the third earn-out period to $0, which resulted in a gain of $19.9 million.

The acquisition agreement for AEG included a contingent earn-out agreement based on the
achievement of operating income thresholds in each of the first two years beginning on the acquisition
date. The maximum earn-out obligation over the two-year earn-out period was $27.1 million ($11.3 million
annually plus a $4.5 million one-time payment based on minimum operating income in each year). The
annual amounts could be earned primarily on a pro-rata basis for operating income within a
predetermined range in each year. To a lesser extent, additional earn-out consideration could be earned for
operating income above the high-end of the range up to the contractual maximum of $27.1 million. AEG
was required to meet a minimum operating income threshold in each year in order to earn any contingent
consideration. These minimum thresholds were $10.0 million and $11.0 million in years one and two,
respectively. In order to earn the maximum contingent consideration, AEG would need to achieve
operating income of $17.5 million in year one and $18.5 million in year two. In addition, if AEG achieved

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5. Mergers and Acquisitions (Continued)

operating income of at least $9.0 million during both earn-out periods, AEG would receive $4.5 million at
the end of the second earn-out period.

The determination of the fair value of the purchase price for AEG on the acquisition date
included our estimate of the fair value of the related contingent earn-out obligation. This initial valuation
was primarily based on probability-weighted internal estimates of AEGs operating income during each
earn-out period. As a result of these estimates, we calculated an initial fair value at the acquisition date of
AEGs contingent earn-out liability of $21.5 million in the second quarter of fiscal 2013. In determining
that AEG would attain 79% of the maximum potential earn-out we considered several factors including
AEGs recent historical revenue and operating income levels and growth rates. We also considered the
recent trend in AEGs backlog level and the prospects for the solid waste industry in the United States.

AEGs first earn-out period ended on the last day of the first quarter of fiscal 2014. As a result,
during the first quarter of fiscal 2014, we performed a preliminary calculation of the contingent
consideration for the first earn-out period and concluded that AEGs operating income in that period
would be higher than both our original estimate at the acquisition date and our previous quarterly
estimates. As a result, we increased the contingent earn-out liability for the first earn-out period, which
resulted in an additional expense of $1.0 million. The contingent consideration of $9.1 million for the first
earn-out period was paid in the second quarter of fiscal 2014.

During calendar 2014, which corresponds to AEGs second earn-out period, adverse weather
conditions hindered AEGs ability to complete its project field work. As a result, in the third quarter of
fiscal 2014, we updated our projection of AEGs operating income for its second earn-out period. This
assessment included a review of the status of on-going projects in AEGs backlog, and the inventory of
prospective new contract awards. As a result of this assessment, we concluded that AEGs operating
income in the second earn-out period would be significantly lower than our original estimate at the
acquisition date, would fall below the minimum operating income threshold, but would still exceed
$9.0 million of operating income in order to earn the additional tranche. As a result, we reduced the
contingent earn-out liability, which resulted in a gain of $8.9 million in the third quarter of fiscal 2014.

During the fourth quarter of fiscal 2014, we performed an updated projection of AEGs operating
income for its second earn-out period based on actual results and the forecast for the remainder of the
second earn-out period. Based on this analysis, we concluded that AEGs operating income in the second
earn-out period would be lower than the $9.0 million needed to receive the $4.5 million of contingent
consideration that remained accrued for performance in both earn-out years. As a result, we reduced the
contingent earn-out liability to $0, which resulted in a gain of $4.5 million in the fourth quarter of fiscal
2014, and net gains of $13.2 million for all of fiscal 2014.

Each time we determined that Cabers, AEGs and Parklands operating income would be lower
than our original estimate at the acquisition date, we also evaluated the related goodwill for potential
impairment. In each case, we determined that the lower income projections were the result of temporary
events, and did not negatively impact the reporting units longer term performance or result in a goodwill
impairment.

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5. Mergers and Acquisitions (Continued)

At October 2, 2016, there was a total maximum of $15.5 million of outstanding contingent
consideration related to acquisitions. Of this amount, $8.8 million was estimated as the fair value and
accrued on our consolidated balance sheet.

The following table summarizes the changes in the carrying value of estimated contingent earn-out
liabilities:

Fiscal Year Ended

October 2, September 27, September 28,
2016 2015 2014
(in thousands)

Beginning balance (at fair value) . . . . . . . . . . . . . . $ 4,169 $ 7,030 $ 81,789

Estimated earn-out liabilities for acquisitions during
the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . 4,745 4,100 6,242
Increases due to re-measurement of fair value
reported in interest expense . . . . . . . . . . . . . . . . 271 136 1,846
Net increase (decrease) due to re-measurement of
fair value reported as losses (gains) in operating
income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,823 (3,113) (58,694)
Foreign exchange impact . . . . . . . . . . . . . . . . . . . . (785) (3,507)
Earn-out payments:
Reported as cash used in operating activities . . . . . (1,984)
Reported as cash used in financing activities . . . . . (3,251) (3,199) (18,662)
Ending balance (at fair value) . . . . . . . . . . . . . . . . $ 8,757 $ 4,169 $ 7,030

6. Goodwill and Intangible Assets

The following table summarizes the changes in the carrying value of goodwill:

WEI RME Total

(in thousands)

Balance at September 28, 2014 . . . . . . . . . . . . . . . . . $ 281,930 $ 432,260 $ 714,190

Goodwill additions . . . . . . . . . . . . . . . . . . . . . . . . 6,272 6,272
Foreign exchange translation . . . . . . . . . . . . . . . . . (27,479) (33,486) (60,965)
Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . (43,703) (14,415) (58,118)
Balance at September 27, 2015 . . . . . . . . . . . . . . . . . 210,748 390,631 601,379
Goodwill additions . . . . . . . . . . . . . . . . . . . . . . . . 9,080 98,538 107,618
Goodwill adjustment . . . . . . . . . . . . . . . . . . . . . . . 1,687 1,687
Foreign exchange translation . . . . . . . . . . . . . . . . . 2,125 5,179 7,304
Balance at October 2, 2016 . . . . . . . . . . . . . . . . . . . . $ 221,953 $ 496,035 $ 717,988

We perform our annual goodwill impairment review at the beginning of our fiscal fourth quarter.
Our last review at June 27, 2016 (i.e. the first day of our fourth quarter in fiscal 2016), indicated that we
had no impairment of goodwill, and all of our reporting units had estimated fair values that were in excess
of their carrying values, including goodwill. We had no reporting units that had estimated fair values that

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6. Goodwill and Intangible Assets (Continued)

exceeded their carrying values by less than 20%, excluding the impact of acquisitions completed within the
last two fiscal years. In addition, we regularly evaluate whether events and circumstances have occurred
that may indicate a potential change in the recoverability of goodwill. We perform interim goodwill
impairment reviews between our annual reviews if certain events and circumstances have occurred, such as
a deterioration in general economic conditions; an increase in the competitive environment; a change in
management, key personnel, strategy or customers; negative or declining cash flows; or a decline in actual
or planned revenue or earnings compared with actual and projected results of relevant prior periods.

In the fourth quarter of fiscal 2015, the mining sector continued to contract in response to lower
global growth expectations driven in large part by Chinas actual and projected slower economic growth.
Consistent with this trend, our mining customers continued their curtailment of capital spending for new
mining projects. As a result, our Global Mining Practice (GMP) reporting unit experienced a 25%
decline in revenue in the fourth quarter of fiscal 2015 compared to the same period of fiscal 2014. This
negative trend was compared to the expected revenue growth of approximately 3% in the previous
goodwill impairment test, performed as of June 30, 2014. In response to these results, we performed a
strategic review of GMP in the fourth quarter of fiscal 2015, and determined that our mining activities
would likely decline further in fiscal 2016, and that revenue and profits would not return to acceptable
levels of performance in the foreseeable future. We also decided to redeploy a significant portion of our
mining resources into other operational areas that have better growth and profitability prospects.
Consequently, as of the first day of fiscal 2016, GMP was no longer a reporting unit. We considered GMPs
financial performance and prospects in our goodwill impairment analysis in the fourth quarter of fiscal
2015 and determined that GMPs fair value had fallen significantly below its carrying value, including
goodwill. As required, we performed further analysis to measure the amount of the impairment loss and, as
a result, we wrote-off all of GMPs goodwill and identifiable intangible assets and recorded a related
impairment charge of $60.8 million ($57.3 million after-tax) in the fourth quarter of fiscal 2015. The
related goodwill and identifiable intangible assets that were determined not to be recoverable totaled
$58.1 million and $2.7 million, respectively.

Our fourth quarter 2016 and 2015 goodwill impairment reviews indicated that we had no other
impairment of goodwill, and all of our other reporting units had estimated fair values that were in excess of
their carrying values, including goodwill. Although we believe that our estimates of fair value for these
reporting units are reasonable, if financial performance for these reporting units falls significantly below
our expectations or market prices for similar business decline, the goodwill for these reporting units could
become impaired.

Foreign exchange impact relates to our foreign subsidiaries with functional currencies that are
different than our reporting currency. The gross amounts of goodwill for WEI were $304.4 million and
$293.1 million at October 2, 2016 and September 27, 2015, respectively, excluding $82.4 million of
accumulated impairment. The gross amounts of goodwill for RME were $529.2 million and $423.8 million
at October 2, 2016 and September 27, 2015, respectively, excluding $33.2 million of accumulated
impairment.

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6. Goodwill and Intangible Assets (Continued)

The gross amount and accumulated amortization of our acquired identifiable intangible assets
with finite useful lives included in Intangible assets net on the consolidated balance sheets, were as
follows:

Fiscal Year Ended

October 2, 2016 September 27, 2015
Weighted-
Average
Remaining
Life Gross Accumulated Gross Accumulated
(in years) Amount Amortization Amount Amortization
($ in thousands)

Non-compete agreements . . . . . . . . . . 0.6 $ 881 $ (840) $ 819 $ (587)

Client relations . . . . . . . . . . . . . . . . . 3.0 112,367 (83,514) 106,676 (67,726)
Backlog . . . . . . . . . . . . . . . . . . . . . . 2.2 23,018 (7,536) 2,115 (1,444)
Technology and trade names . . . . . . . . 4.0 7,778 (3,192) 2,506 (2,027)
Total . . . . . . . . . . . . . . . . . . . . . . . $ 144,044 $ (95,082) $ 112,116 $ (71,784)

Foreign currency translation adjustments reduced net identifiable intangible assets by $1.1 million
in fiscal 2016. Amortization expense for the identifiable intangible assets for fiscal 2016, 2015 and 2014 was
$22.1 million, $20.2 million and $27.3 million, respectively.

Estimated amortization expense for the succeeding five years and beyond is as follows:

Amount
(in thousands)

2017 . . . . . . . $ 22,617
2018 . . . . . . . 14,295
2019 . . . . . . . 6,989
2020 . . . . . . . 3,755
2021 . . . . . . . 666
Beyond . . . . . 640
Total . . . . . . $ 48,962

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7. Property and Equipment

Property and equipment consisted of the following:

Fiscal Year Ended

October 2, September 27,
2016 2015
(in thousands)

Land and buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,683 $ 3,661

Equipment, furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . 180,750 176,883
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,261 21,582
Total property and equipment . . . . . . . . . . . . . . . . . . . . . . . 214,694 202,126
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . (146,867) (137,220)
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . $ 67,827 $ 64,906

The depreciation expense related to property and equipment, including assets under capital leases,
was $22.8 million, $23.1 million and $26.5 million for fiscal 2016, 2015 and 2014, respectively. In fiscal 2015,
we sold assets with a net book value of $4.4 million for net proceeds of $10.4 million, and recognized a
corresponding net gain of $6.0 million, which is included in Other costs of revenue in our consolidated
statements of income. This equipment was primarily related to our RCM segment.

8. Income Taxes

The income before income taxes, by geographic area, was as follows:

Fiscal Year Ended

October 2, September 27, September 28,
2016 2015 2014
(in thousands)
Income (loss) before income taxes:
United States . . . . . . . . . . . . . . . . . . . . . . . $ 113,576 $ 118,822 $ 118,900
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,890 (38,501) 25,443
Total income before income taxes . . . . . . . . $ 124,466 $ 80,321 $ 144,343

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8. Income Taxes (Continued)

Income tax expense consisted of the following:

Fiscal Year Ended

October 2, September 27, September 28,
2016 2015 2014
(in thousands)
Current:
Federal . . . . . . . . . . . . . . . . $ 22,277 $ 23,836 $ 26,503
State . . . . . . . . . . . . . . . . . . 5,634 5,072 7,551
Foreign . . . . . . . . . . . . . . . . 6,651 3,773 1,759
Total current income tax
expense . . . . . . . . . . . . . 34,562 32,681 35,813
Deferred:
Federal . . . . . . . . . . . . . . . . 6,231 7,218 5,957
State . . . . . . . . . . . . . . . . . . (16) 2,335 434
Foreign . . . . . . . . . . . . . . . . (164) (1,141) (6,536)
Total deferred income tax
expense (benefit) . . . . . . 6,051 8,412 (145)

Total income tax expense . . . . . . $ 40,613 $ 41,093 $ 35,668

Total income tax expense was different from the amount computed by applying the U.S. federal
statutory rate to pre-tax income as follows:

Fiscal Year Ended

October 2, September 27, September 28,
2016 2015 2014
Tax at federal statutory rate . . . . . . . . . . . . 35.0% 35.0% 35.0%
State taxes, net of federal benefit . . . . . . . . 3.1 5.0 3.4
Research and Development (R&D) credits (3.4) (3.8) (0.6)
Domestic production deduction . . . . . . . . . . (0.7) (0.8) (0.7)
Tax differential on foreign earnings . . . . . . . (5.5) (2.5) (5.5)
Non-deductible executive compensation . . . . 2.0
Goodwill and contingent consideration . . . . . 12.0 (8.2)
Stock compensation . . . . . . . . . . . . . . . . . . 0.3 0.5 0.2
Valuation allowance . . . . . . . . . . . . . . . . . . 2.4 5.7 0.3
Change in uncertain tax positions . . . . . . . . (2.0)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4 0.1 0.8

Total income tax expense . . . . . . . . . . . . . . 32.6% 51.2% 24.7%

Our effective tax rates for fiscal 2016 and 2015 were 32.6% and 51.2%, respectively. In fiscal 2016,
we incurred $13.3 million of acquisition and integration expenses and debt pre-payment fees for which no
tax benefit was recognized. Of this amount, $6.4 million resulted from acquisition expenses that were not
tax deductible, and $6.9 million resulted from integration expenses and debt pre-payment fees incurred in
jurisdictions with current and historical net operating losses where the related deferred tax asset was fully
reserved. Additionally, during the first quarter of fiscal 2016, the Protecting Americans from Tax Hikes Act

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8. Income Taxes (Continued)

of 2015 was signed into law which permanently extended the federal R&D credits retroactive to January 1,
2015. Our income tax expense for fiscal 2016 included a tax benefit of $2.0 million attributable to operating
income during the last nine months of fiscal 2015, primarily related to the retroactive recognition of the
R&D credits. Our income tax expense for fiscal 2015 included a similar retroactive tax benefit of
$1.2 million attributable to operating income during the last nine months of fiscal 2014. Our effective tax
rate in fiscal 2015 also reflected the impact of the $60.8 million goodwill and intangible asset impairment
charge, of which most was not tax deductible. Excluding these items, our effective tax rates for fiscal 2016
and 2015 were 30.9% and 32.5%, respectively. The lower tax rate this year primarily reflects a
measurement change in tax positions taken in prior years relating primarily to developments in our
ongoing IRS examination that reduced our effective tax rate by 2.0% in fiscal 2016.

We are currently under examination by the Internal Revenue Service for fiscal years 2010 through
2013, and by the California Franchise Tax Board for fiscal years 2004 through 2009. We are also subject to
various other state audits. With a few exceptions, we are no longer subject to U.S. federal, state and local,
or non-U.S. income tax examinations for fiscal years before 2010.

Temporary differences comprising the net deferred income tax liability shown on the
accompanying consolidated balance sheets were as follows:

Fiscal Year Ended

October 2, September 27,
2016 2015
(in thousands)
Deferred Tax Asset:
State taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 697 $ 1,746
Reserves and contingent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 2,539 3,842
Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . 3,817 4,115
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,663 19,404
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,684 10,516
Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,910
Loss carry-forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,514 5,512
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25,447) (7,791)
Total deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,467 40,254
Deferred Tax Liability:
Unbilled revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (54,638) (46,513)
Prepaid expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,921) (5,506)
Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (33,268) (33,068)
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,358) (10,713)
Total deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (100,185) (95,800)

Net deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (59,718) $ (55,546)

At October 2, 2016, undistributed earnings of our foreign subsidiaries, primarily in Canada,

amounting to approximately $65.9 million are expected to be permanently reinvested. Accordingly, no
provision for U.S. income taxes or foreign withholding taxes has been made. Upon distribution of those
earnings, we would be subject to U.S. income taxes and foreign withholding taxes. Assuming the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8. Income Taxes (Continued)

permanently reinvested foreign earnings were repatriated under the laws and rates applicable at October 2,
2016, the incremental federal tax applicable to those earnings would be approximately $5.9 million.

At October 2, 2016, we had available unused state net operating loss (NOL) carry forwards of
$43.7 million that expire at various dates from 2022 to 2036; and available foreign NOL carry forwards of
$74.2 million, of which $15.0 million expire at various dates from 2022 to 2036, and $59.2 million have no
expiration date. We have performed an assessment of positive and negative evidence regarding the
realization of the deferred tax assets. This assessment included the evaluation of scheduled reversals of
deferred tax liabilities, availability of carrybacks, cumulative losses in recent years, and estimates of
projected future taxable income. Although realization is not assured, based on our assessment, we have
concluded that it is more likely than not that the assets will be realized except for the assets related to the
loss carry-forwards and certain foreign intangibles for which a valuation allowance of $25.4 million has
been provided.

At October 2, 2016, we had $22.8 million of unrecognized tax benefits. Included in the balance of
unrecognized tax benefits at the end of fiscal year 2016 were $22.8 million of tax benefits that, if
recognized, would affect our effective tax rate. It is not expected that there will be a significant change in
the unrecognized tax benefits in the next 12 months. A reconciliation of the beginning and ending amount
of unrecognized tax benefits is as follows:

Fiscal Year Ended

October 2, September 27, September 28,
2016 2015 2014
(in thousands)

Beginning balance . . . . . . . . . . . . . . . . . . . . . . . $ 21,618 $ 21,717 $ 25,886

Additions for current year tax positions . . . . . . . . 2,802 1,147 1,243
Additions for prior year tax positions . . . . . . . . . . 1,466 2,309 1,416
Reductions for prior year tax positions . . . . . . . . . (3,100) (23)
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,532) (6,828)
Ending balance . . . . . . . . . . . . . . . . . . . . . . . . . $ 22,786 $ 21,618 $ 21,717

We recognize potential interest and penalties related to unrecognized tax benefits in income tax
expense. During fiscal years 2016 and 2015, we accrued additional interest income of $0.2 million and
interest expense of $0.4 million, respectively, and recorded reductions in accrued interest of $0 million and
$0.5 million, respectively, as a result of audit settlements and other prior-year adjustments. The amount of
interest and penalties accrued at October 2, 2016 and September 27, 2015 was $1.0 million and
$1.2 million, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. Long-Term Debt

Long-term debt consisted of the following:

Fiscal Year Ended

October 2, September 27,
2016 2015
(in thousands)

Credit facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 346,813 $ 192,203

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198 673
Total long-term debt . . . . . . . . . . . . . . . . . . . . . . 347,011 192,876
Less: Current portion of long-term debt . . . . . . . . . . (15,510) (11,904)

Long-term debt, less current portion . . . . . . . . . . . . $ 331,501 $ 180,972

On May 7, 2013, we entered into a credit agreement that provided for a $205 million term loan
facility and a $460 million revolving credit facility both maturing in May 2018. On May 29, 2015, we
entered into a third amendment to our credit agreement (as amended, the Credit Agreement) that
extended the maturity date for the term loan and the revolving credit facility to May 2020. The Credit
Agreement is a $654.8 million senior secured, five-year facility that provides for a $194.8 million term loan
facility ( the Term Loan Facility) and a $460 million revolving credit facility (the Revolving Credit
Facility). The Credit Agreement allows us to, among other things, finance certain permitted open market
repurchases of our common stock, permitted acquisitions, and cash dividends and distributions. The
Revolving Credit Facility includes a $150 million sublimit for the issuance of standby letters of credit, a
$20 million sublimit for swingline loans, and a $150 million sublimit for multicurrency borrowings. The
interest rate provisions of the term loan and the revolving credit facility did not materially change.

The Term Loan Facility is subject to quarterly amortization of principal, with $10.3 million payable
in year 1, and $15.4 million payable in years 2 through 5. The Term Loan may be prepaid at any time
without penalty. We may borrow on the Revolving Credit Facility, at our option, at either (a) a
Eurocurrency rate plus a margin that ranges from 1.15% to 2.00% per annum, or (b) a base rate for loans
in U.S. dollars (the highest of the U.S. federal funds rate plus 0.50% per annum, the banks prime rate or
the Eurocurrency rate plus 1.00%) plus a margin that ranges from 0.15% to 1.00% per annum. In each
case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterly. The Term
Loan Facility is subject to the same interest rate provisions. The interest rate of the Term Loan Facility at
the date of inception was 1.57%. The Credit Agreement expires on May 29, 2020, or earlier at our
discretion upon payment in full of loans and other obligations.

As of October 2, 2016, we had $346.8 million in outstanding borrowings under the Credit
Agreement, which was comprised of $176.8 million under the Term Loan Facility and $170 million under
the Revolving Credit Facility at a weighted-average interest rate of 1.92% per annum. In addition, we had
$1.3 million in standby letters of credit under the Credit Agreement. Our effective weighted-average
interest rate on borrowings outstanding at October 2, 2016 under the Credit Agreement, including the
effects of interest rate swap agreements described in Note 14, Derivative Financial Instruments, was
2.52%. At October 2, 2016, we had $288.7 million of available credit under the Revolving Credit Facility, of
which $222.4 million could be borrowed without a violation of our debt covenants. In addition, we entered
into agreements with three banks to issue up to $53 million in standby letters of credit. The aggregate

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. Long-Term Debt (Continued)

amount of standby letters of credit outstanding under these additional facilities and other bank guarantees
was $25.3 million, of which $6.0 million was issued in currencies other than the U.S. dollar.

The Credit Agreement contains certain affirmative and restrictive covenants, and customary
events of default. The financial covenants provide for a maximum Consolidated Leverage Ratio of 3.00 to
1.00 (total funded debt/EBITDA, as defined in the Credit Agreement) and a minimum Consolidated Fixed
Charge Coverage Ratio of 1.25 to 1.00 (EBITDA, as defined in the Credit Agreement minus capital
expenditures, cash interest plus taxes plus principal payments of indebtedness including capital leases,
notes and post-acquisition payments).

At October 2, 2016, we were in compliance with these covenants with a consolidated leverage ratio
of 1.91x and a consolidated fixed charge coverage ratio of 2.82x. Our obligations under the Credit
Agreement are guaranteed by certain of our subsidiaries and are secured by first priority liens on (i) the
equity interests of certain of our subsidiaries, including those subsidiaries that are guarantors or borrowers
under the Credit Agreement, and (ii) our accounts receivable, general intangibles and intercompany loans,
and those of our subsidiaries that are guarantors or borrowers.

At the time of the acquisition, Coffey had an existing secured credit facility with a bank, comprised
of an overdraft facility, a term facility and a bank guaranty facility. This facility was amended in March
2016 to extend the term of the existing facility to April 8, 2016, and allow for the issuance of a parent
guarantee and release of certain subsidiary guarantors. On April 8, 2016, the facility was amended again to
provide for a secured AUD$30 million facility, which may be used by Coffey for bank overdrafts,
short-term cash advances or bank guarantees. This facility expires in April 2017, is secured by assets of
certain Australian and New Zealand subsidiaries, and is supported by a parent guarantee. At October 2,
2016, amounts outstanding under this facility consisted solely of bank guarantees of $5.6 million.

The following table presents scheduled maturities of our long-term debt:

Amount
(in thousands)

2017 . . . . . . . . . . $ 15,510
2018 . . . . . . . . . . 15,425
2019 . . . . . . . . . . 15,388
2020 . . . . . . . . . . 300,688
2021 and beyond .
Total . . . . . . . . $ 347,011

10. Leases

We lease office and field equipment, vehicles and buildings under various operating leases. In
fiscal 2016, 2015 and 2014, we recognized $75.0 million, $66.4 million and $70.0 million of expense

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10. Leases (Continued)

associated with operating leases, respectively. The following are amounts payable under non-cancelable
operating and capital lease commitments for the next five fiscal years and beyond:

Operating Capital
(in thousands)

2017 . . . . . . . . . . . . . . . . . . . . . . . . $ 83,050 $ 89
2018 . . . . . . . . . . . . . . . . . . . . . . . . 56,687 52
2019 . . . . . . . . . . . . . . . . . . . . . . . . 42,916 13
2020 . . . . . . . . . . . . . . . . . . . . . . . . 31,533
2021 . . . . . . . . . . . . . . . . . . . . . . . . 18,673
Beyond . . . . . . . . . . . . . . . . . . . . . . 22,732
Total . . . . . . . . . . . . . . . . . . . . . . $ 255,591 154

Less: Amounts representing interest . 6

Net present value . . . . . . . . . . . . . $ 148

We vacated certain facilities under long-term non-cancelable leases and recorded contract
termination costs of $2.9 million in fiscal 2016 and $0 million in fiscal 2015. These amounts were initially
measured at the fair value of the portion of the lease payments associated with the vacated facilities,
reduced by estimated sublease rentals, less the write off of a prorated portion of existing deferred items
previously recognized on these leases. We expect the remaining lease payments to be paid through the
various lease expiration dates that continue until 2025.

We initially measured the lease contract termination liability at the fair value of the prorated
portion of the lease payments associated with the vacated facilities, reduced by estimated sublease rentals
and other costs. If the actual timing and potential termination costs or realization of sublease income differ
from our estimates, the resulting liabilities could vary from recorded amounts. These liabilities are
reviewed periodically and adjusted when necessary.

The following is a reconciliation of the beginning and ending balances of these liabilities related to
lease contract termination costs:
WEI RME RCM Total
(in thousands)

Balance at September 28, 2014 . . $ 900 $ 5,046 $ 423 $ 6,369

Adjustments (1) . . . . . . . . . . . . (369) (2,585) (246) (3,200)
Balance at September 27, 2015 .. 531 2,461 177 $ 3,169
Cost transfer between groups .. 637 (637)
Cost incurred and charged to
expense . . . . . . . . . . . . . .. 1,418 749 2,167
Adjustments (1) . . . . . . . . . . .. (1,034) (1,060) (138) (2,232)
Balance as October 2, 2016 . . . . . $ 1,552 $ 1,513 $ 39 $ 3,104

(1)
Adjustments of the actual timing and potential termination costs or realization of sublease income.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. Stockholders Equity and Stock Compensation Plans

At October 2, 2016, we had the following stock-based compensation plans:

Employee Stock Purchase Plan (ESPP). Purchase rights to purchase common stock are
granted to our eligible full and part-time employees, and shares of common stock are issued
upon exercise of the purchase rights. An aggregate of 2,373,290 shares may be issued pursuant
to such exercise. The maximum amount that an employee can contribute during a purchase
right period is $5,000. The exercise price of a purchase right is the lesser of 100% of the fair
market value of a share of common stock on the first day of the purchase right period or 85% of
the fair market value on the last day of the purchase right period (December 15, or the business
day preceding December 15 if December 15 is not a business day).

2005 Equity Incentive Plan (2005 EIP). Key employees and non-employee directors may be
granted equity awards, including stock options and restricted stock and restricted stock units
(RSUs). Options granted before March 6, 2006 vest at 25% on the first anniversary of the
grant date, and the balance vests monthly thereafter, such that these options become fully
vested no later than four years from the date of grant. These options expire no later than ten
years from the date of grant. Options granted on and after March 6, 2006 vest at 25% on each
anniversary of the grant date. These options expire no later than eight years from the grant date.
RSUs granted to date vest at 25% on each anniversary of the grant date.

Our Compensation Committee has also awarded restricted stock to executive officers and
non-employee directors under the 2005 EIP. Restricted stock grants generally vest over a
minimum three-year period, and may be performance-based, determined by EPS growth, or
service-based. No further awards will be made under the 2005 EIP.

2015 Equity Incentive Plan (2015 EIP). Key employees and non-employee directors may be
granted equity awards, including stock options, performance share units (PSUs) and RSUs.
Shares issued with respect to awards granted under the 2015 EIP other than stock options or
stock appreciation rights, which are referred to as full value awards, are counted against the
2015 EIPs aggregate share limit as three shares for every share or unit actually issued. At
October 2, 2016, there were 3.7 million shares available for future awards pursuant to the 2015
EIP.

The stock-based compensation and related income tax benefits were as follows:

Fiscal Year Ended

October 2, September 27, September 28,
2016 2015 2014
(in thousands)

Total stock-based compensation . $ 12,964 $ 10,926 $ 10,374

Income tax benefit related to
stock-based compensation . . . . (4,656) (3,811) (3,696)
Stock-based compensation, net
of tax benefit . . . . . . . . . . . $ 8,308 $ 7,115 $ 6,678

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. Stockholders Equity and Stock Compensation Plans (Continued)

Stock Options

Stock option activity for the fiscal year ended October 2, 2016 was as follows:

Weighted-
Average
Weighted- Remaining
Number of Average Contractual Aggregate
Options Exercise Price Term Intrinsic Value
(in thousands) per Share (in years) (in thousands)

Outstanding on September 27,

2015 . . . . . . . . . . . . . . . . 2,985 $ 23.71
Granted . . . . . . . . . . . . . 242 27.16
Exercised . . . . . . . . . . . . . (839) 30.04
Forfeited . . . . . . . . . . . . . (21) 23.59
Outstanding at October 2,
2016 . . . . . . . . . . . . . . . . 2,367 $ 24.88 4.04 $ 25,068
Vested or expected to vest at
October 2, 2016 . . . . . . . . 2,320 $ 24.88 3.99 $ 24,579
Exercisable on October 2,
2016 . . . . . . . . . . . . . . . . 1,776 $ 24.10 3.04 $ 20,197

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference
between our closing stock price on the last trading day of fiscal 2016 and the exercise price, times the
number of shares) that would have been received by the in-the-money option holders if they had exercised
their options on October 2, 2016. This amount will change based on the fair market value of our stock. At
October 2, 2016, we expect to recognize $3.5 million of unrecognized compensation cost related to stock
option grants over a weighted-average period of 4 years.

The weighted-average fair value of stock options granted during fiscal 2016, 2015 and 2014 was
$8.05, $8.20 and $9.36, respectively. The aggregate intrinsic value of options exercised during fiscal 2016,
2015 and 2014 was $7.3 million, $2.3 million and $9.3 million, respectively.

The fair value of our stock options was estimated on the date of grant using the Black-Scholes
option pricing model. The following assumptions were used in the calculation:

Fiscal Year Ended

October 2, September 27, September 28,
2016 2015 2014
Dividend yield . . . . . . . . . . . . . 1.2% 1.0%
Expected stock price volatility . . 36.1% 38.8% 36.2% 38.8% 36.1% 38.8%
Risk-free rate of return, annual . 1.6% 1.8% 1.5% 1.7% 1.3% 1.5%

For purposes of the Black-Scholes model, forfeitures were estimated based on historical
experience. For the fiscal 2016, 2015 and 2014 year-ends, we based our expected stock price volatility on
historical volatility behavior and current implied volatility behavior. Our risk-free rate of return was based

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11. Stockholders Equity and Stock Compensation Plans (Continued)

on constant maturity rates provided by the U.S. Treasury. The expected life was based on historical
experience.

Net cash proceeds from the exercise of stock options were $18.0 million, $10.8 million and
$23.8 million for fiscal 2016, 2015 and 2014, respectively. Our policy is to issue shares from our authorized
shares upon the exercise of stock options. The actual income tax benefit realized from exercises of
nonqualified stock options and disqualifying dispositions of qualified options for fiscal 2016, 2015 and 2014
was $5.3 million, $3.0 million and $4.6 million, respectively.

Restricted Stock, PSUs and RSUs

The fair value of the total compensation cost of each restricted stock award was determined at the
date of grant using the market price of the underlying common stock as of the date of grant. For
performance-based awards, our expected performance is reviewed to estimate the percentage of shares
that will vest. The total compensation cost of the awards is then amortized over their applicable vesting
period on a straight-line basis.

Restricted stock activity for the fiscal year ended October 2, 2016 was as follows:

Weighted-
Number of Average Grant
Shares Date Fair
(in thousands) Value

Nonvested balance at September 27, 2015 . . . . . . . . . 104 $ 27.15

Granted . . . . . . . .............. . . . . . . . . . 14 28.58
Vested . . . . . . . . .............. . . . . . . . . . (49) 28.58
Forfeited . . . . . . . .............. . . . . . . . . . (34) 24.26

Nonvested balance at October 2, 2016 . . . . . . . . . . . 35 $ 28.58

Vested or expected to vest at October 2, 2016 . . . . . . 35 $ 28.58

In fiscal 2016, 2015 and 2014, we awarded 0 shares, 0 shares and 117,067 shares, respectively, of
restricted stock to certain of our executive officers and non-employee directors. Vesting is performance-
based, such that the percentage of awarded shares that ultimately vests, from 0% to 140%, is dependent on
fiscal year EPS growth rates for the three fiscal years that end after the award date. In fiscal 2016 and 2015,
an additional 13,932 shares and 15,605 shares, respectively, were awarded for performance-based
adjustments in excess of 100% vesting. Restricted stock forfeitures resulted from performance-based
vesting of less than 100%. Forfeited shares return to the pool of authorized shares available for award.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. Stockholders Equity and Stock Compensation Plans (Continued)

PSU activity for the fiscal year ended October 2, 2016 was as follows:

Weighted-
Number of Average Grant
Shares Date Fair
(in thousands) Value

Nonvested balance at September 27, 2015 . . . . . . . . . 139 $ 31.66

Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 31.63

Nonvested balance at October 2, 2016 . . . . . . . . . . . 277 $ 31.65

In fiscal 2016, we awarded 137,777 PSUs to our executive officers and non-employee directors at
the weighted-average fair value of $31.63 per share on the award date. All of the PSUs are performance-
based and vest, if at all, after the conclusion of the three-year performance period. The number of PSUs
that ultimately vest is based 50% on the growth in our EPS and 50% on our relative total shareholder
return over the vesting period.

RSU activity for the fiscal year ended October 2, 2016 was as follows:

Weighted-
Number of Average Grant
Shares Date Fair
(in thousands) Value

Nonvested balance at September 27, 2015 . . . . . . . . . 483 $ 26.75

Granted . . . . . . . .............. . . . . . . . . . 217 27.14
Vested . . . . . . . . .............. . . . . . . . . . (180) 26.03
Forfeited . . . . . . . .............. . . . . . . . . . (21) 27.11

Nonvested balance at October 2, 2016 . . . . . . . . . . . 499 $ 27.16

In fiscal 2016, we also awarded 216,539 RSUs to our employees at a weighted average fair value of
$27.14 per share on the award date. All of the RSUs have time-based vesting over a four-year period,
except that RSUs awarded to directors vest after one year. At October 2, 2016, there were 499,021 RSUs
outstanding. RSU forfeitures result from employment terminations prior to vesting. Forfeited shares
return to the pool of authorized shares available for award.

In fiscal 2015, we awarded 234,685 RSUs to our employees at the weighted average fair value of
$27.21 per share on the award date. All of the RSUs have time-based vesting over a four-year period,
except that RSUs awarded to directors vest after one year. At September 27, 2015, there were
483,111 RSUs outstanding. RSU forfeitures result from employment terminations prior to vesting.
Forfeited shares return to the pool of authorized shares available for award.

The stock-based compensation expense related to restricted stock, PSUs and RSUs for fiscal years
2016, 2015 and 2014 was $10.3 million, $7.5 million and $4.6 million, respectively, and was included in the
total stock-based compensation expense. At October 2, 2016, there was $13.5 million of unrecognized

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. Stockholders Equity and Stock Compensation Plans (Continued)

compensation costs related to restricted stock, PSUs and RSUs that will be substantially recognized by the
end of fiscal 2019.

ESPP

The following table summarizes shares purchased, weighted-average purchase price, cash received
and the aggregate intrinsic value for shares purchased under the ESPP:

Fiscal Year Ended

October 2, September 27, September 28,
2016 2015 2014
(in thousands, except for purchase price)

Shares purchased . . . . . . . . . . . . . . . ..... . . 209 243 245

Weighted-average purchase price . . . . . ..... . . $ 22.54 $ 21.44 $ 22.99
Cash received from exercise of purchase rights . . $ 4,707 $ 5,204 $ 5,604
Aggregate intrinsic value . . . . . . . . . . ..... . . $ 710 $ 1,277 $ 1,221

The grant date fair value of each award granted under the ESPP was estimated using the Black-
Scholes option pricing model with the following assumptions:

Fiscal Year Ended

October 2, September 27, September 28,
2016 2015 2014
Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . 1.3% 1.1%
Expected stock price volatility . . . . . . . . . . . . . . 23.7% 23.7% 29.2%
Risk-free rate of return, annual . . . . . . . . . . . . . 0.2% 0.2% 0.1%
Expected life (in years) . . . . . . . . . . . . . . . . . . 1 1 1

For fiscal 2016, 2015 and 2014, we based our expected stock price volatility on historical volatility
behavior and current implied volatility behavior. The risk-free rate of return was based on constant
maturity rates provided by the U.S. Treasury. The expected life was based on the ESPP terms and
conditions.

Included in stock-based compensation expense for fiscal 2016, 2015 and 2014 was $0.4 million,
$0.6 million and $0.7 million, respectively, related to the ESPP. The unrecognized stock-based
compensation costs for awards granted under the ESPP at October 2, 2016 and September 27, 2015 were
$0.1 million. At October 2, 2016, ESPP participants had accumulated $2.8 million to purchase our common
stock.

12. Retirement Plans

We have established defined contribution plans including 401(k) plans. Generally, employees are
eligible to participate in the defined contribution plans upon completion of one year of service and in the
401(k) plans upon commencement of employment. For fiscal 2016, 2015 and 2014, employer contributions
to the plans were $10.7 million, $9.8 million and $9.6 million, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Retirement Plans (Continued)

We have established a non-qualified deferred compensation plan for certain key employees and
non-employee directors. Eligible employees and non-employee directors may elect to defer the receipt of
salary, incentive payments, restricted stock, PSU and RSU awards, and non-employee director fees, which
are generally invested by us in individual variable life insurance contracts we own that are designed to
informally fund savings plans of this nature. At October 2, 2016 and September 27, 2015, the consolidated
balance sheets reflect assets of $20.9 million and $19.5 million, respectively, related to the deferred
compensation plan in Other long-term assets, and liabilities of $20.8 million and $19.3 million,
respectively, related to the deferred compensation plan in Other long-term liabilities.

13. Earnings Per Share

The following table sets forth the number of weighted-average shares used to compute basic and
diluted EPS:

Fiscal Year Ended

October 2, September 27, September 28,
2016 2015 2014
(in thousands, except per share data)

Net income attributable to Tetra Tech . . . . . . . . . . . . . . . . . . . . . $ 83,783 $ 39,074 $ 108,266

Weighted-average common shares outstanding basic . . . . . . . . 58,186 60,913 64,379
Effect of diluted stock options and unvested restricted stock . . . . 780 619 767
Weighted-average common stock outstanding diluted . . . . . . . . 58,966 61,532 65,146
Earnings per share attributable to Tetra Tech:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.44 $ 0.64 $ 1.68
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.42 $ 0.64 $ 1.66

For 2016, 2015 and 2014, 0, 1.0 million and 0 options were excluded from the calculation of
dilutive potential common shares, respectively. These options were not included in the computation of
dilutive potential common shares because the assumed proceeds per share exceeded the average market
price per share for that period. Therefore, their inclusion would have been anti-dilutive.

14. Derivative Financial Instruments

We use certain interest rate derivative contracts to hedge interest rate exposures on our variable
rate debt. We enter into foreign currency derivative contracts with financial institutions to reduce the risk
that cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. Our
hedging program is not designated for trading or speculative purposes.

We recognize derivative instruments as either assets or liabilities on the accompanying

consolidated balance sheets at fair value. We record changes in the fair value (i.e., gains or losses) of the
derivatives that have been designated as accounting hedges in our consolidated balance sheets as
accumulated other comprehensive income (loss).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. Derivative Financial Instruments (Continued)

In fiscal 2013, we entered into three interest rate swap agreements that we have designated as cash
flow hedges to fix the variable interest rates on a portion of borrowings under our term loan facility. In the
first quarter of fiscal 2014, we entered into two interest rate swap agreements that we designated as cash
flow hedges to fix the variable interest rates on the borrowings under our term loan facility. At October 2,
2016 and September 27, 2015, the effective portion of our interest rate swap agreements designated as cash
flow hedges before tax effect was $1.6 million and $2.3 million, respectively, all of which we expect to be
reclassified from accumulated other comprehensive income (loss) to interest expense within the next
12 months.

As of October 2, 2016, the notional principal, fixed rates and related expiration dates of our
outstanding interest rate swap agreements are as follows:

Notional Amount Fixed Expiration

(in thousands) Rate Date

$ 44,203 1.36% May 2018

44,203 1.34% May 2018
44,203 1.35% May 2018
22,102 1.23% May 2018
22,102 1.24% May 2018

The fair values of our outstanding derivatives designated as hedging instruments were as follows:

Fair Value of Derivative

Instruments as of
October 2, September 27,
Balance Sheet Location 2016 2015
(in thousands)

Interest rate swap agreements . . . . . . . . . . . . . . . . . Other current liabilities $ 1,572 $ 2,518

The impact of the effective portions of derivative instruments in cash flow hedging relationships
on income and other comprehensive income from our interest rate swap agreements was immaterial for
the fiscal years ended October 2, 2016 and September 27, 2015. Additionally, there were no ineffective
portions of derivative instruments. Accordingly, no amounts were excluded from effectiveness testing for
our foreign currency forward contracts and interest rate swap agreements. We had no derivative
instruments that were not designated as hedging instruments for fiscal 2016, 2015 and 2014.

116
 TETRA TECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

The accumulated balances and reporting period activities for fiscal 2016 and 2015 related to
reclassifications out of accumulated other comprehensive income (loss) are summarized as follows:

Foreign Accumulated
Currency Gain (Loss) Other
Translation on Derivative Comprehensive
Adjustments Instruments Income (Loss)
(in thousands)

Balances at September 28, 2014 . . . . . . . . . . . . . . . . . $ (43,085) $ 547 $ (42,538)

Other comprehensive loss before reclassifications . . . . . . (98,144) (203) (98,347)
Amounts reclassified from accumulated other
comprehensive income
Interest rate contracts, net of tax (1) . . . . . . . . . . . . . (2,286) (2,286)
Net current-period other comprehensive loss . . . . . . . . . (98,144) (2,489) (100,633)
Balances at September 27, 2015 . . . . . . . . . . . . . . . . . $ (141,229) $ (1,942) $ (143,171)
Other comprehensive loss before reclassifications . . . . . . 14,385 2,722 17,107
Amounts reclassified from accumulated other
comprehensive income
Interest rate contracts, net of tax (1) . . . . . . . . . . . . . (1,944) (1,944)
Net current-period other comprehensive loss . . . . . . . . . 14,385 778 15,163
Balances at October 2, 2016 . . . . . . . . . . . . . . . . . . . . $ (126,844) $ (1,164) $ (128,008)

(1)
This accumulated other comprehensive component is reclassified in Interest expense in our consolidated
statements of operations. See Note 14, Derivative Financial Instruments, for more information.

16. Fair Value Measurements

Derivative Instruments. For additional information about our derivative financial instruments (see
Note 2, Basis of Presentation and Preparation and Note 14, Derivative Financial Instruments).

Contingent Consideration. We measure our contingent earn-out liabilities at fair value on a

recurring basis (see Note 2, Basis of Presentation and Preparation and Note 5, Mergers and
Acquisitions for further information).

Debt. The fair value of long-term debt was determined using the present value of future cash
flows based on the borrowing rates currently available for debt with similar terms and maturities (Level 2
measurement, as described in Note 2, Basis of Presentation and Preparation Fair Value of Financial
Instruments). The carrying value of our long-term debt approximated fair value at October 2, 2016 and
September 27, 2015. At October 2, 2016, we had borrowings of $346.8 million outstanding under our
Credit Agreement, which were used to fund our business acquisitions, working capital needs, share
repurchases, dividends, capital expenditures and contingent earn-outs (see Note 9, Long-Term Debt for
more information).

117
 TETRA TECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

17. Joint Ventures

Consolidated Joint Ventures

The aggregate revenue of the consolidated joint ventures was $3.7 million, $7.5 million and
$12.3 million for fiscal 2016, 2015 and 2014, respectively. The assets and liabilities of these consolidated
joint ventures were immaterial at fiscal 2016, 2015 and 2014 year-ends. These assets are restricted for use
only by those joint ventures and are not available for our general operations. Cash and cash equivalents
maintained by the consolidated joint ventures at October 2, 2016 and September 27, 2015 were $0.2 million
and $0.7 million, respectively.

Unconsolidated Joint Ventures

We account for our unconsolidated joint ventures using the equity method of accounting. Under
this method, we recognize our proportionate share of the net earnings of these joint ventures within
Other costs of revenue in our consolidated statements of income. For fiscal 2016, 2015 and 2014, we
reported $1.7 million, $5.1 million and $2.8 million of equity in earnings of unconsolidated joint ventures,
respectively. Our maximum exposure to loss as a result of our investments in unconsolidated variable
interest entities is typically limited to the aggregate of the carrying value of the investment. Future funding
commitments for the unconsolidated joint ventures are immaterial. The unconsolidated joint ventures are,
individually and in aggregate, immaterial to our consolidated financial statements.

The aggregate carrying values of the assets and liabilities of the unconsolidated joint ventures were
$15.6 million and $13.5 million, respectively, at October 2, 2016, and $17.1 million and $15.2 million,
respectively, at September 27, 2015.

18. Commitments and Contingencies

We are subject to certain claims and lawsuits typically filed against the engineering, consulting and
construction profession, alleging primarily professional errors or omissions. We carry professional liability
insurance, subject to certain deductibles and policy limits, against such claims. However, in some actions,
parties are seeking damages that exceed our insurance coverage or for which we are not insured. While
management does not believe that the resolution of these claims will have a material adverse effect,
individually or in aggregate, on our financial position, results of operations or cash flows, management
acknowledges the uncertainty surrounding the ultimate resolution of these matters.

19. Reportable Segments

Our reportable segments are described as follows:

WEI: WEI provides consulting and engineering services worldwide for a broad range of water
and infrastructure-related needs in both developed and emerging economies. WEI supports both public
and private clients including federal, state/provincial, and local governments, and global and local
commercial clients. The primary markets for WEIs services include water resources analysis and water
management, environmental restoration, government consulting, and a broad range of civil infrastructure
master planning and engineering design for facilities, transportation, and regional and local development.
WEIs services span from early data collection and monitoring, to data analysis and information

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 TETRA TECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

19. Reportable Segments (Continued)

technology, to science and engineering applied research, to engineering design, to construction

management and operations and maintenance.

RME: RME provides consulting and engineering services worldwide for a broad range of
resource management and energy needs. RME supports both private and public clients, including global
industrial and commercial clients, U.S. federal agencies in large scale remediation, and major international
development agencies. The primary markets for RMEs services include natural resources, energy,
international development, remediation, waste management and utilities. RMEs services span from early
data collection and monitoring, to data analysis and information technology, to science and engineering
applied research, to engineering design, to construction management and operations and maintenance.
RME also supports EPCM for full service implementation of commercial projects.

RCM: We report the results of the wind-down of our non-core construction activities in the RCM
reportable segment. The remaining work to be performed in this segment will be substantially completed
in fiscal 2017.

Management evaluates the performance of these reportable segments based upon their respective
segment operating income before the effect of amortization expense related to acquisitions, and other
unallocated corporate expenses. We account for inter-segment sales and transfers as if the sales and
transfers were to third parties; that is, by applying a negotiated fee onto the costs of the services
performed. All significant intercompany balances and transactions are eliminated in consolidation. In fiscal
2016, the Corporate segment operating losses included $19.5 million of acquisition and integration
expenses, as described in Note 5, Mergers and Acquisitions.

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 TETRA TECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

19. Reportable Segments (Continued)

The following tables set forth summarized financial information concerning our reportable
segments:

Reportable Segments

Fiscal Year Ended

October 2, September 27, September 28,
2016 2015 2014
(in thousands)
Revenue
WEI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,028,281 $ 993,631 $ 1,018,522
RME . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,569,702 1,282,046 1,333,127
RCM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,150 86,575 221,108
Elimination of inter-segment revenue . . . . . . . (66,664) (62,931) (88,943)
Total revenue . . . . . . . . . . . . . . . . . . . . . $ 2,583,469 $ 2,299,321 $ 2,483,814

Operating Income
WEI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 95,996 $ 93,142 $ 93,853
RME . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112,202 93,359 84,862
RCM . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,834) (8,614) (45,151)
Corporate (1) . . . . . . . . . . . . . . . . . . . . . . . (60,509) (90,203) 20,269
Total operating income . . . . . . . . . . . . . . . $ 135,855 $ 87,684 $ 153,833

Depreciation
WEI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,797 $ 5,335 $ 6,302
RME . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,703 13,342 14,089
RCM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 736 1,801 2,958
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . 1,520 2,632 3,103
Total depreciation . . . . . . . . . . . . . . . . . . $ 22,756 $ 23,110 $ 26,452

(1)
Includes goodwill and other intangible assets impairment charges, amortization of intangibles, other
costs and other income not allocable to segments. The impairment charges of $60.8 million for fiscal
2015 was recorded at Corporate. The intangible asset amortization expense for fiscal 2016, 2015 and
2014 was $22.1 million, $20.2 million and $27.3 million, respectively. Corporate results also included
income (loss) for fair value adjustments to contingent consideration liabilities of $(2.8) million,
$3.1 million and $58.7 million for fiscal 2016, 2015 and 2014, respectively. Fiscal 2016 also included
$19.5 million of acquisition and integration related expenses recorded at Corporate.

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 TETRA TECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

19. Reportable Segments (Continued)

October 2, September 27,

2016 2015
(in thousands)
Total Assets
WEI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 308,438 $ 287,112
RME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 522,895 422,133
RCM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,107 57,612
Corporate (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 930,339 792,385
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,800,779 $ 1,559,242

(1)
Corporate assets consist of intercompany eliminations and assets not allocated to segments including
goodwill, intangible assets, deferred income taxes and certain other assets.

Geographic Information

Fiscal Year Ended

October 2, 2016 September 27, 2015 September 28, 2014
Long-Lived Long-Lived Long-Lived
Revenue Assets (2) Revenue Assets (2) Revenue Assets (2)
(in thousands)
United States . . . . . . . . . . . . . $ 1,858,551 $ 59,334 $ 1,734,439 $ 61,526 $ 1,840,129 $ 61,940
Foreign countries (1) . . . . . . . . . 724,918 39,067 564,882 32,230 643,685 38,576

(1)
Includes revenue generated from our foreign operations, primarily in Canada and Australia, and revenue
generated from non-U.S. clients. Long-lived assets consist primarily of amounts from our Canadian operations.
(2)
Excludes goodwill and other intangible assets.

Major Clients

Other than the U.S. federal government, we had no single client that accounted for more than
10% of our revenue. All of our segments generated revenue from all client sectors.

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 TETRA TECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

19. Reportable Segments (Continued)

The following table presents our revenue by client sector:

Fiscal Year Ended

October 2, September 27, September 28,
2016 2015 2014
(in thousands)
Client Sector
International (1) . . . . . . . . . . . . . . . . . $ 724,918 $ 564,882 $ 643,649
U.S commercial . . . . . . . . . . . . . . . . . 763,443 736,815 713,266
U.S. federal government (2) . . . . . . . . . 784,368 709,600 772,290
U.S. state and local government . . . . . . 310,740 288,024 354,609
Total . . . . . . . . . . . . . . . . . . . . . . . $ 2,583,469 $ 2,299,321 $ 2,483,814

(1)
Includes revenue generated from foreign operations, primarily in Canada and Australia, and revenue
generated from non-U.S. clients.
(2)
Includes revenue generated under U.S. federal government contracts performed outside the United
States.

20. Quarterly Financial Information Unaudited

In the opinion of management, the following unaudited quarterly data for the fiscal years ended
October 2, 2016 and September 27, 2015 reflect all adjustments necessary for a fair statement of the results
of operations.

In fiscal 2016, we incurred Coffey-related acquisition and integration expenses totaling

$19.5 million. These costs were recognized in the second, third, and fourth quarters of fiscal 2016 in the
amounts of $15.9 million, $1.0 million, and $2.6 million, respectively. In addition, interest expense in fiscal
2016 includes Coffey-related debt pre-payment fees of $1.9 million that were incurred in the second
quarter. As a result of GMPs financial performance and prospects, we wrote-off all of GMPs goodwill

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 TETRA TECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

20. Quarterly Financial Information Unaudited (Continued)

and intangible assets and recorded a related impairment charge of $60.8 million ($57.3 million after-tax) in
the fourth quarter of fiscal 2015.

First Second Third Fourth

Quarter Quarter Quarter Quarter
(in thousands, except per share data)
Fiscal Year 2016
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 560,708 $ 627,384 $ 666,869 $ 728,508
Operating income . . . . . . . . . . . . . . . . . . . . . 32,930 16,650 39,085 47,190
Net income attributable to Tetra Tech . . . . . . . 23,239 3,744 25,694 31,106
Earnings per share attributable to Tetra Tech (1):
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.39 $ 0.06 $ 0.44 $ 0.54
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.39 $ 0.06 $ 0.44 $ 0.53
Weighted-average common shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,058 58,451 57,796 57,309
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,793 59,131 58,616 58,192
Fiscal Year 2015
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . .. $ 581,056 $ 564,763 $ 575,108 $ 578,394
Operating income (loss) . . . . . . . . . . . . . . . .. 36,612 30,398 40,721 (20,047)
Net income (loss) attributable to Tetra Tech . .. 25,575 19,017 26,206 (31,724)
Earnings (loss) per share attributable to Tetra
Tech (1):
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . .. $ 0.41 $ 0.31 $ 0.44 $ (0.53)
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.41 $ 0.31 $ 0.43 $ (0.53)
Weighted-average common shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,452 61,153 60,207 59,963
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,112 61,723 60,792 59,963

(1)
The sum of the quarterly EPS may not add up to the full-year EPS due to rounding.

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 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of disclosure controls and procedures and changes in internal control over financial
reporting

At October 2, 2016, we carried out an evaluation of the effectiveness of the design and operation
of our disclosure controls and procedures. Based on our managements evaluation (with the participation
of our principal executive officer and principal financial officer), our principal executive officer and
principal financial officer have concluded that, as of the end of the period covered by this report, our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act),
were effective.

Consistent with guidance issued by the Securities and Exchange Commission that an assessment of
internal controls over financial reporting of a recently acquired business may be omitted from
managements evaluation of disclosure controls and procedures, management is excluding an assessment
of such internal controls of Coffey and INDUS, which we acquired January 18, 2016 and March 11, 2016,
respectively, from its evaluation of the effectiveness of our disclosure controls and procedures. The total
assets and revenue related to Coffey and INDUS combined are approximately 5.8% and 12.4%,
respectively, of the related consolidated financial statement amounts as of and for the fiscal year ended
October 2, 2016.

Managements Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over
financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is
a process designed by, or under the supervision of, our principal executive and principal financial officer
and effected by our Board of Directors, management and other personnel to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of consolidated financial statements for
external purposes in accordance with U.S. GAAP. Internal controls include those policies and procedures
that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with U.S. GAAP and that our
receipts and expenditures are being made only in accordance with authorizations of our management and
directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a material effect on our consolidated financial
statements. Because of its inherent limitations, internal control over financial reporting may not prevent or
detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate. Accordingly, even effective internal control
over financial reporting can only provide reasonable assurance of achieving their control objectives.

Under the supervision and with the participation of our management, including our Chief
Executive Officer and Chief Financial Officer, we assessed the effectiveness of our internal control over
financial reporting at October 2, 2016, based on the criteria in Internal Control Integrated Framework
(2013) issued by the COSO. Based upon this assessment, management has concluded that our internal
control over financial reporting was effective at October 2, 2016, at a reasonable assurance level.

124
 PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited the
consolidated financial statements included in this Form 10-K, has issued a report on our internal control
over financial reporting. This report, dated November 22, 2016, appears on page 75 of this Form 10-K.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months
ended October 2, 2016 that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item relating to our directors and nominees, regarding
compliance with Section 16(a) of the Exchange Act, and regarding our Audit Committee is included under
the captions Item No. 1 Election of Directors and Section 16(a) Beneficial Ownership Reporting
Compliance in our Proxy Statement related to the 2017 Annual Meeting of Stockholders and is
incorporated by reference.

Pursuant to General Instruction G(3) of Form 10-K, the information required by this item relating
to our executive officers is included under the caption Executive Officers of the Registrant in Part I of
this Report.

We have adopted a code of ethics that applies to our principal executive officer and all members of
our finance department, including our principal financial officer and principal accounting officer. This
code of ethics, entitled Finance Code of Professional Conduct, is posted on our website. The Internet
address for our website is www.tetratech.com, and the code of ethics may be found through a link to the
Investor Relations section of our website.

We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K for any amendment
to, or waiver from, a provision of this code of ethics by posting any such information on our website, at the
address and location specified above.

Item 11. Executive Compensation

The information required by this item is included under the captions Item No. 1 Election of
Directors and Executive Compensation Tables in our Proxy Statement related to the 2017 Annual
Meeting of Stockholders and is incorporated by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters

The information required by this item relating to security ownership of certain beneficial owners
and management, and securities authorized for issuance under equity compensation plans, is included
under the caption Security Ownership of Management and Significant Stockholders in our Proxy
Statement related to the 2017 Annual Meeting of Stockholders and is incorporated by reference.

125
 Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item relating to review, approval or ratification of transactions
with related persons is included under the caption Related Person Transactions, and the information
required by this item relating to director independence is included under the caption Item No. 1
Election of Directors, in each case in our Proxy Statement related to the 2017 Annual Meeting of
Stockholders and is incorporated by reference.

Item 14. Principal Accounting Fees and Services

The information required by this item is included under the captions Item No. 4 Ratification of
Independent Registered Public Accounting Firm in our Proxy Statement related to the 2017 Annual
Meeting of Stockholders and is incorporated by reference.

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a.) 1. Financial Statements

The Index to Financial Statements and Financial Statement Schedule on page 74 is
incorporated by reference as the list of financial statements required as part of this
Report.

2. Financial Statement Schedule

The Index to Financial Statements and Financial Statement Schedule on page 74 is
incorporated by reference as the list of financial statement schedules required as part of
this Report.

3. Exhibits
The exhibit list in the Index to Exhibits on pages 130 131 is incorporated by reference
as the list of exhibits required as part of this Report.

126
 TETRA TECH, INC.
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

For the Fiscal Years Ended

September 28, 2014, September 27, 2015 and October 2, 2016
(in thousands)

Balance at Charged to
Beginning of Costs, Expenses Balance at
(1) (2)
Period and Revenue Deductions Other End of Period
Allowance for doubtful accounts:

Fiscal 2014 . . . . . . . . . . . . . . . . . . . . $44,623 $ 1,467 $ (4,855) $ (1,455) $39,780

Fiscal 2015 . . . . . . . . . . . . . . . . . . . . 39,780 (1,034) (5,965) (1,291) 31,490

Fiscal 2016 . . . . . . . . . . . . . . . . . . . . 31,490 8,082 (12,191) 7,852 35,233

Income tax valuation allowance:

Fiscal 2014 . . . . . . . . . . . . . . . . . . . . $ 7,459 $ 396 $ $ (279) $ 7,576

Fiscal 2015 . . . . . . . . . . . . . . . . . . . . 7,576 4,609 (4,394) 7,791

Fiscal 2016 . . . . . . . . . . . . . . . . . . . . 7,791 3,856 13,800 25,447

(1)
Primarily represents uncollectible accounts written off, net of recoveries.
(2)
Includes allowances from new business acquisitions, loss in foreign jurisdictions, currency adjustments, and
valuation allowance adjustments related to net operating loss carry-forwards.

127
 SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this Report on Form 10-K to be signed on its behalf by the undersigned,
thereunto duly authorized.

TETRA TECH, INC.

By: /s/ DAN L. BATRACK

Dated: November 16, 2016 Dan L. Batrack
Chairman, Chief Executive Officer and
President

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Dan L. Batrack and Steven M. Burdick, jointly and severally, his
attorney-in-fact, each with the full power of substitution, for such person, in any and all capacities, to sign
any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he
might do or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and
agents, or his substitute, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report on Form 10-K
has been signed below by the following persons on behalf of the registrant and in the capacities and on the
dates indicated.

Signature Title Date

Chairman, Chief Executive Officer and
/s/ DAN L. BATRACK President November 16, 2016
Dan L. Batrack (Principal Executive Officer)

/s/ STEVEN M. BURDICK Chief Financial Officer November 16, 2016

Steven M. Burdick (Principal Financial Officer)

/s/ BRIAN N. CARTER Senior Vice President, Corporate Controller November 16, 2016
Brian N. Carter (Principal Accounting Officer)

/s/ ALBERT E. SMITH Director November 16, 2016

Albert E. Smith

/s/ HUGH M. GRANT Director November 16, 2016

Hugh M. Grant

128
 Signature Title Date
/s/ PATRICK C. HADEN Director November 16, 2016
Patrick C. Haden

/s/ J. CHRISTOPHER LEWIS Director November 16, 2016

J. Christopher Lewis

/s/ JOANNE M. MAGUIRE Director November 16, 2016

Joanne M. Maguire

/s/ J. KENNETH THOMPSON Director November 16, 2016

J. Kenneth Thompson

/s/ RICHARD H. TRULY Director November 16, 2016

Richard H. Truly

/s/ KIRSTEN M. VOLPI Director November 16, 2016

Kirsten M. Volpi

/s/ KIMBERLY E. RITRIEVI Director November 16, 2016

Kimberly E. Ritrievi

129
 INDEX TO EXHIBITS

3.1 Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to
the Companys Current Report on Form 8-K dated February 26, 2009).
3.2 Bylaws of the Company (amended and restated as of April 2009) (incorporated by reference to
Exhibit 3.1 to the Companys Current Report on Form 8-K dated April 24, 2009), and amended as
of November 7, 2016 (incorporated by reference to Exhibit 3.1 to the Companys Current Report
on Form 8-K dated November 9, 2016).
10.1 Amended and Restated Credit Agreement dated as of May 7, 2013 among Tetra Tech, Inc., Tetra
Tech Canada Holding Corporation, the lenders party thereto and Bank of America, N.A., as
Administrative Agent (incorporated by reference to Exhibit 10.1 to the Companys Current Report
on Form 8-K dated May 9, 2013).
10.2 Amendment No. 1 dated as of September 27, 2013 to the Amended and Restated Credit
Agreement dated as of May 7, 2013 among Tetra Tech, Inc., Tetra Tech Canada Holding
Corporation, the lenders party thereto and Bank of America, N.A., as Administrative Agent
(incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K dated
September 27, 2013).
10.3 Amendment No. 2 dated as of June 23, 2014 to the Amended and Restated Credit Agreement
dated as of May 7, 2013 among Tetra Tech, Inc., Tetra Tech Canada Holding Corporation, the
lenders party thereto and Bank of America, N.A., as Administrative Agent (incorporated by
reference to Exhibit 10.1 to the Companys Current Report on Form 8-K dated June 23, 2014).
10.4 Amendment No. 3 dated as of May 29, 2015 to the Amended and Restated Credit Agreement
dated as of May 7, 2013 (as amended by Amendment No. 1 dated as of September 27, 2013 and
Amendment No. 2 dated as of June 23, 2014) among Tetra Tech, Inc., Tetra Tech Canada Holding
Corporation, Bank of America, N.A., as Administrative Agent, L/C Issuer and a Lender, U.S.
Bank National Association, as L/C Issuer and a Lender, and the other Lenders party thereto
(incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K dated
June 2, 2015).
10.5 Amendment No. 4 dated as of July 14, 2016 to the Amended and Restated Credit Agreement
dated as of May 7, 2013 (as amended by Amendment No. 1 dated as of September 27, 2013,
Amendment No. 2 dated as of June 23, 2014 and Amendment No. 3 dated as of May 29, 2015)
among Tetra Tech, Inc., Tetra Tech Canada Holding Corporation, Bank of America, N.A., as
Administrative Agent, L/C Issuer and a Lender, U.S. Bank National Association, as L/C Issuer and
a Lender, and the other Lenders party thereto (incorporated by reference to Exhibit 10.1 to the
Companys Quarterly Report on Form 10-Q for the quarter ended June 26, 2016).
10.6 Amended and Restated Security Agreement dated as of May 7, 2013 made by Tetra Tech, Inc. and
certain of its subsidiaries in favor of Bank of America, N.A., as Administrative Agent
(incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K dated
May 9, 2013).
10.7 Security Agreement dated as of May 7, 2013 made by Tetra Tech Canada Holding Corporation and
certain of its subsidiaries in favor of Bank of America, N.A., as Administrative Agent
(incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K dated
May 9, 2013).
10.8 Amended and Restated Pledge Agreement dated as of May 7, 2013 made by Tetra Tech, Inc. and
certain of its subsidiaries in favor of Bank of America, N.A., as Administrative Agent
(incorporated by reference to Exhibit 10.4 to the Companys Current Report on Form 8-K dated
May 9, 2013).

130
10.9 Pledge Agreement dated as of May 7, 2013 made by Tetra Tech Canada Holding Corporation and
certain of its subsidiaries in favor of Bank of America, N.A., as Administrative Agent
(incorporated by reference to Exhibit 10.5 to the Companys Current Report on Form 8-K dated
May 9, 2013).
10.10 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.2 to the Companys
Annual Report on Form 10-K for the fiscal year ended September 30, 2012).
10.11 2005 Equity Incentive Plan (as amended through November 7, 2011) (incorporated by reference to
the Companys Proxy Statement for its 2012 Annual Meeting of Stockholders held on February 28,
2012).*
10.12 First Amendment to the 2005 Equity Incentive Plan (as amended through November 7, 2011)
(incorporated by reference to Exhibit 10.9 to the Companys Annual Report on Form 10-K for the
fiscal year ended September 29, 2013).*
10.13 2015 Equity Incentive Plan (incorporated by reference to the Companys Proxy Statement for its
2015 Annual Meeting of Stockholders held on March 5, 2015).*
10.14 Form of Indemnity Agreement entered into between the Company and each of its directors and
executive officers (incorporated by reference to Exhibit 10.20 to the Companys Annual Report on
Form 10-K for the fiscal year ended October 3, 2004).*
10.15 Deferred Compensation Plan (incorporated by reference to Exhibit 10.17 to the Companys
Annual Report on Form 10-K for the fiscal year ended September 30, 2007).*
10.16 Amendment to Deferred Compensation Plan dated November 14, 2013 (incorporated by
reference to Exhibit 10.20 to the Companys Annual Report on Form 10-K for the fiscal year
ended September 29, 2013).*
10.17 Amended and Restated Change of Control Agreement with Dan L. Batrack dated November 7,
2016.+*
10.18 Form of Amended and Restated Change of Control Agreement for executive vice presidents
(incorporated by reference to Exhibit 10.22 to the Companys Annual Report on Form 10-K for
the fiscal year ended September 28, 2014).*
10.19 Executive Compensation Plan (as amended and restated November 14, 2013) (incorporated by
reference to Exhibit 10.23 to the Companys Annual Report on Form 10-K for the fiscal year
ended September 29, 2013).*
21. Subsidiaries of the Company.+
23. Consent of Independent Registered Public Accounting Firm (PricewaterhouseCoopers LLP).+
24. Power of Attorney (included on page 128 of this Annual Report on Form 10-K).
31.1 Chief Executive Officer Certification pursuant to Rule 13a-14(a)/15d-14(a).+
31.2 Chief Financial Officer Certification pursuant to Rule 13a-14(a)/15d-14(a).+
32.1 Certification of Chief Executive Officer pursuant to Section 1350.+
32.2 Certification of Chief Financial Officer pursuant to Section 1350.+
95. Mine Safety Disclosures.+

131
101 The following financial information from our Companys Annual Report on Form 10-K, for the
period ended October 2, 2016, formatted in eXtensible Business Reporting Language:
(i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated
Statement of Comprehensive Income (Loss), (iv) Consolidated Statements of Equity,
(v) Consolidated Statements of Cash Flows, (vi) Notes to Consolidated Financial Statements.+(1)

* Indicates a management contract or compensatory arrangement.

+ Filed herewith.
(1)
Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Annual
Report on Form 10-K shall not be deemed to be filed for purposes of Section 18 of the Exchange
Act or otherwise subject to the liability of the section, and shall not be deemed part of a registration
statement, prospectus or other document filed under the Securities Act or the Exchange Act, except as
shall be expressly set forth by specific reference in such filings.

132
 EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8
(Nos. 333-203817, 333-184958, 333-174032, 333-158932, 333-148712, 333-145201, 333-145199, 333-85558,
333-53036, 333-211153, and 333-11757) of Tetra Tech, Inc. of our report dated November 22, 2016 relating
to the financial statements, financial statement schedule and the effectiveness of internal control over
financial reporting, which appears in this Form 10-K.

/s/ PRICEWATERHOUSECOOPERS LLP

PricewaterhouseCoopers LLP
Los Angeles, California
November 22, 2016
 EXHIBIT 31.1

Chief Executive Officer Certification Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Dan L. Batrack, certify that:

1. I have reviewed this Annual Report on Form 10-K of Tetra Tech, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information

included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrants other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrants disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrants internal control over financial reporting; and

5. The registrants other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the audit committee
of registrants board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect the registrants
ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal control over financial reporting.

Dated: November 22, 2016 /s/ Dan L. Batrack

Dan L. Batrack
Chairman, Chief Executive Officer and President
(Principal Executive Officer)
 EXHIBIT 31.2

Chief Financial Officer Certification Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Steven M. Burdick, certify that:

1. I have reviewed this Annual Report on Form 10-K of Tetra Tech, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information

included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrants other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrants disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrants internal control over financial reporting; and

5. The registrants other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the audit committee
of registrants board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect the registrants
ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal control over financial reporting.

Dated: November 22, 2016 /s/ Steven M. Burdick

Steven M. Burdick
Chief Financial Officer
(Principal Financial Officer)
 EXHIBIT 32.1

Certification of Chief Executive Officer Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Tetra Tech, Inc. (the Company) on Form 10-K for the
fiscal year ended October 2, 2016, as filed with the Securities and Exchange Commission on the date
hereof (the Report), I, Dan L. Batrack, Chief Executive Officer of the Company, hereby certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) of the Securities Exchange
Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.

Dated: November 22, 2016 /s/ DAN L. BATRACK

Dan L. Batrack
Chairman, Chief Executive Officer and President
(Principal Executive Officer)

A signed original of this written statement required by Section 906, or other document
authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the
electronic version of this written statement required by Section 906, has been provided to Tetra Tech, Inc.
and will be retained by Tetra Tech, Inc. and furnished to the Securities and Exchange Commission or its
staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission as an
exhibit to the Form 10-K and shall not be considered filed as part of the Form 10-K.
 EXHIBIT 32.2

Certification of Chief Financial Officer Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Tetra Tech, Inc. (the Company) on Form 10-K for the
fiscal year ended October 2, 2016, as filed with the Securities and Exchange Commission on the date
hereof (the Report), I, Steven M. Burdick, Chief Financial Officer and Treasurer of the Company,
hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) of the Securities Exchange
Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.

Dated: November 22, 2016 /s/ STEVEN M. BURDICK

Steven M. Burdick
Chief Financial Officer
(Principal Financial Officer)

A signed original of this written statement required by Section 906, or other document
authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the
electronic version of this written statement required by Section 906, has been provided to Tetra Tech, Inc.
and will be retained by Tetra Tech, Inc. and furnished to the Securities and Exchange Commission or its
staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission as an
exhibit to the Form 10-K and shall not be considered filed as part of the Form 10-K.
(This page has been left blank intentionally.)
Company Information

BOARD OF DIRECTORS CORPORATE OFFICERS CORPORATE HEADQUARTERS

Dan L. Batrack
Chairman, Chief Executive Officer and
President, Tetra Tech, Inc.
Hugh M. Grant
Retired Vice Chair & Regional Managing
Partner, Ernst & Young LLP
Patrick C. Haden
Special Advisor to the President,
University of Southern California
J. Christopher Lewis
Managing Director,
Riordan, Lewis & Haden
Dan L. Batrack
Chairman, Chief Executive Officer
and President
Steven M. Burdick
Executive Vice President,
Chief Financial Officer
Ronald J. Chu
Executive Vice President and President
of Resource Management & Energy
Leslie L. Shoemaker
Executive Vice President and President
of Water, Environment & Infrastructure
Tetra Tech, Inc.
3475 East Foothill Boulevard
Pasadena, California 91107-6024 USA
Telephone: +1 (626) 351-4664
Fax: +1 (626) 351-5291
TRANSFER AGENT AND
REGISTRAR
Computershare Trust Company, N.A.
250 Royall Street
Canton, Massachusetts 02021-1011 USA
Telephone: +1 (800) 962-4284

Joanne M. Maguire William R. Brownlie STOCK LISTING

Retired Executive Vice President,
Lockheed Martin Space Systems
Company
Kimberly E. Ritrievi
President, The Ritrievi Group LLC
Albert E. Smith
Retired Executive Vice President,
Lockheed Martin
J. Kenneth Thompson
President and Chief Executive Officer,
Pacific Star Energy, LLC
Richard H. Truly
Vice Admiral U.S. Navy (Ret.),
Retired NASA Administrator
Kirsten M. Volpi
EVP for Finance and Administration,
COO, CFO and Treasurer, Colorado
School of Mines
CHAIRMAN EMERITUS
Li-San Hwang
Former Chairman and
Chief Executive Officer, Tetra Tech, Inc.
Senior Vice President, Chief Engineer
and Corporate Risk Management
Officer
Brian N. Carter
Senior Vice President, Corporate
Controller and Chief Accounting Officer
Craig L. Christensen
Senior Vice President,
Chief Information Officer
Richard A. Lemmon
Senior Vice President,
Corporate Administration
Kevin P. McDonald
Senior Vice President,
Human Resources and Leadership
Development
Janis B. Salin
Senior Vice President,
General Counsel and Secretary
The Companys common stock is
traded on the NASDAQ Global Select
Market (Symbol: TTEK)
ANNUAL MEETING
Tetra Tech will hold its annual
stockholders meeting at:
The Westin Pasadena
191 N. Los Robles Avenue
Pasadena, California 91101
at 10:00 a.m. PT on March 2, 2017
Telephone: +1 (626) 792-2727
Website: westin.com/pasadena
SHAREHOLDER INQUIRIES
Tetra Tech, Inc.
Attn: Investor Relations
3475 East Foothill Boulevard
Pasadena, California 91107-6024 USA
Telephone: +1 (626) 470-2844
Fax: +1 (626) 470-2123
Email: IR@tetratech.com
Website: tetratech.com

3475 East Foothill Boulevard

Pasadena, California 91107

tetratech.com